Europe open: Stocks drift lower amid ECB disappointment
European stocks drifted lower in early trade as investors mulled over the latest inflation figures from China and continued to digest Thursday’s European Central Bank announcement.
At 0855 BST, the benchmark Stoxx Europe 600 index and Germany’s DAX were both off 0.2% and France’s CAC 40 was 0.1% lower.
At the same time, oil prices retreated. West Texas Intermediate was down 1% to $47.14 a barrel while Brent crude was 0.9% weaker at $49.51.
Stocks fell on Thursday after the European Central Bank left its benchmark refinancing rate at 0% and disappointed investors by making no changes to its trillion-euro bond-buying programme.
German trade data did little to lift the mood on Friday, with figures from Destatis showing exports fell 2.6% on the month in July, which was the worst decline in almost a year and missed expectations of a 0.3% increase. Meanwhile, imports declined 0.7% on the month, missing forecasts of a 0.8% jump.
French industrial production figures were no cheerier, showing a 0.6% drop in July from June versus estimates of a 0.3% rise.
Chinese inflation figures were also in focus, as consumer price inflation rose 1.3% in August from a year earlier, down from July’s 1.8% and marking the lowest level since October 2015. It was also weaker than the 1.7% jump expected by economists.
The country’s producer price index fell 0.8% in August from a year ago, which was more or less in line with expectations and compared to a 1.7% fall in July.
Markus Huber, a trader at City of London Markets, said: “European shares are trading little changed to moderately lower this morning on the back of weaker-than-expected German trade data and disappointing French industrial output figures. Furthermore yesterday's inaction by the ECB is still hanging over stocks. Judging by yesterday's afternoon selloff, expectations for 'a bit more' from Draghi seem to have been rather high.
“For the remainder of the day there isn't that much left in regard to data being released therefore range-trading appears likely with a bit more position squaring by longs ahead of the weekend possibly later this afternoon.”
On the corporate front, Monte Paschi di Siena nudged lower after Fabrizio Viola, the chief executive of the world’s oldest bank, resigned.
Pub companies were in focus in London. JD Wetherspoon rallied after posting a 12.5% jump in full-year pre-tax profit to £66m. It was a different picture for Greene King, however, whose shares slid after it reported a strong start to the year but sounded a cautious note on the impact of the Brexit vote.