Europe midday: UK outperforms as World Bank warning hits sentiment
European shares were still sharply lower at midday as investors digested data from China and the UK, while dire warnings from the World Bank also hit sentiment.
The pan-European Stoxx 600 index was down more than 1.25% with most major bourses in the red. Britain’s FTSE outperformed and moved into positive territory, despite official data showing retail sales fell sharply last month hit by rising prices and the ensuing cost-of-living crisis.
According to the Office for National Statistics, in seasonally-adjusted terms, total retail sales volumes in the UK fell at a month-on-month pace of 1.6% in August (consensus: -1.4%), following a rise of 0.4% in July.
It was a similar story in year-on-year terms with sales down by 5.4%, versus a 3.4% decline in July (consensus: -3.7%).
Meanwhile in China, economic growth in Asia's largest economy held up slightly better than expected in August.
That was due in part to support from government policies, which helped offset some of the drag from Covid-19 restrictions and power shortages during the recent heat wave, said Capital Economics.
Fresh home price declines had also weighed on consumer sentiment.
According to the National Bureau of Statistics, growth in retail sales, industrial production and fixed asset investment in China all surprised to the upside in August.
Investors were also spooked after the World Bank on Thursday said the global economy might be sliding towards a recession as central banks looked to aggressively raise rates in an attempt to stymie rampant inflation.
In equity news, German gas importer Uniper pared losses as it struggled to keep up with costs after the sudden stoppage of a major natural gas pipeline by Russia earlier in the month.
Royal Mail shares were hammered by the negative read-across in markets from US peer FedEx's decision to withdraw its full-year guidance after Thursday's close.
AstraZeneca gained after positive trial results for two of its drugs.
Reporting by Frank Prenesti at Sharecast.com