Europe open: Shares lower as Germany enters technical recession

The pan-regional Stoxx 600 was down 0.25% in early trade. Germany's DAX fell 0.64% after after first quarter GDP was revised lower to -0.3% from 0%, following a contraction of 0.5% in the previous quarter, landing Europe’s largest economy in a technical recession over winter.

“The reluctance of households to buy was apparent in a variety of areas,” the German statistics office said, with consumers spending less on food and beverages, clothing and footwear, and furnishings.

In the US the talks on agreeing a debt ceiling dragged on, with Republicans trying to extract spending cuts from the Biden administration in return for a deal that would stop a default.

"Rating agency Fitch has placed the US AAA rating on negative watch, citing concerns about the looming US debt ceiling deadline. In 2011, S&P cut the US rating to AA-plus, which triggered a major market sell-off," said Interactive Investor analyst Victoria Scholar.

"The Democrats and Republicans have yet to find common ground and reach a deal, with hopes that the stalemate will finally end in the days ahead so that a catastrophic US default can be averted. However time is ticking, prompting a bout of market nervousness as the deadline draws closer.”

In equity news, Johnson Matthey fell as lower metals prices and inflation hit annual profits.

Reporting by Frank Prenesti for Sharecast.com