Europe midday: Stocks fall amid earnings avalanche

At midday, the benchmark Stoxx Europe 600 index was down 0.9%, while Germany’s DAX and France’s CAC 40 were 0.7% lower.

At the same time, oil prices nudged up in choppy trade ahead of data from the US Department of Energy later in the day, which is expected to show US stockpiles rose 1.2m barrels last week.

West Texas Intermediate was up 0.1% to $43.67 a barrel and Brent crude was 0.2% firmer at $45.06.

In corporate news, Royal Dutch Shell pushed lower after saying first-quarter earnings on a current cost of supplies basis and stripping out one-off items fell 58% from the previous year to $1.55bn as weak oil prices continued to take their toll.

Air France-KLM flew lower despite reporting a narrower loss for the first quarter, as it warned on the outlook.

Deutsche Telekom was in the red despite releasing better-than-expected first-quarter earnings.

Supermarket chain Sainsbury’s was under the cosh as its full-year results were hit by falling food prices and the industry price war.

BHP Billiton slumped on news that federal prosecutors in Brazil have launched a $43bn lawsuit against its part-owned Samarco Mineração mining unit to claim compensation for the dam disaster last November.

Brewer Anheuser Busch InBev fell as its first-quarter sales missed estimates, while Apple supplier Dialog Semiconductor tumbled after saying underlying operating profit fell 58% on the year in the first quarter.

On the upside, Societe Generale rallied as its first-quarter profit beat analysts’ expectations and the bank announced additional cost cuts, while Ryanair nudged up after posting a 10% rise in April passenger numbers.

Siemens was also firmer after second-quarter profit surpassed forecasts, while London-listed fashion retailer Next pushed up despite cutting its sales and profit guidance and warning of a slowdown.

On the data front, retail sales in the Eurozone fell more than expected in March, according to the latest figures from Eurostat.

Sales were down 0.5% on the month compared with expectations of a 0.1% decline. On the year, sales in the 19 countries that share the euro were up 2.1%, missing forecasts of a 2.5% increase.

Dennis de Jong, managing director at UFX.com, said: “Unpredictable weather and an unsure political outlook are causing uncertainty across the board, which will challenge ECB president Mario Draghi’s attempts at establishing stability.

“As the UK’s EU referendum approaches, Draghi will know that there are sure to be more rocky roads ahead, as trade and political wrangles spell uncertainty for the retail sector.”

Elsewhere, Markit’s final Eurozone composite output index came in at 53.0 in April, in line with the flash estimate but a touch lower than March’s 53.1.

The final Eurozone services business activity index printed at 53.1, down a touch from the flash estimate of 53.2 but unchanged from March’s reading.

Looking ahead to the afternoon session, investors will eye the release of the US ADP employment report, which is widely seen as a pre-cursor to Friday’s nonfarm payrolls.