Europe midday: Shares flat on poor China data, moderate OECD forecasts
European shares were flat at midday on Wednesday, after a slump in exports from China last month dented sentiment and the OECD predicted a slight rise in global economic growth this year.
The pan-European Stoxx 600 was down 0.04% at the open, with all major bourses off the pace.
China’s exports fell last month in another indication that the rebound in the world’s second-largest economy was losing steam.
Exports fell by 7.5% in May to $283.5bn on an annual basis, a sharp reversal from the increase of 8.5% in April, data released by China Customs showed.
The May figure was below the expectations of a fall of 0.1%. Imports fell by 4.5% to $217.7bn, up from a fall of 7.9% in April, and above expectations of a 6.8% fall.
"This is being taken as fresh evidence of China’s bumpy recovery from the pandemic and another sign that the snap back in activity is waning sharply," said Hargreaves Lansdown analyst Susannah Streeter.
"Higher inflation in key markets, is likely to be part of the picture, given that the tightening of monetary policy is designed to curtail consumer spending power and with people buying fewer goods that they want but don’t necessarily need, Chinese exports are becoming casualties."
The global economy is forecast to grow moderately this year as inflationary pressures ease, but a recovery was still some way off, the Organisation for Economic Co-operation and Development (OECD) said in its latest forecasts.
The Paris-based organisation is now forecasting growth of 2.7%, up from 2.6% in its March report, with upgrades for the US, China and the eurozone.
Forecasts for the US and China were lifted by 0.1 percentage points to to 1.6% and 5.4% respectively.
The eurozone was increased by 0.1 points to 0.9% while Britain was upgraded to avoid a recession, with growth now forecast at 0.3% instead of a contraction, but Germany was lowered to zero growth.
In corporate news, shares in Inditex gained after the Zara brand owner reported a 16% jump in sales of its spring-summer collection.
Danske Bank shares rose after the Danish lender raised its long-term earnings target.
Atos was also a riser after the IT firm forecast sales at loss-making unit Tech Foundations to hit bottom in 2024.
Shares in Sweden's Viaplay slumped again after the departure of CEO Anders Jensen.
Reporting by Frank Prenesti for Sharecast.com