Europe open: Weak Chinese data weighs on stocks

Alexander Bueso Sharecast | 14 Sep, 2017 09:37 | | |

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Weaker-than-expected readings on China's economy are weighing on stocks in the early going as investors wait on the Bank of England's rate decision and consumer price data due out later in the day Stateside.

As of 0827 BST, the benchmark Stoxx 600 was 0.12% lower to 380.87, alongside a dip of 0.24% in Germany's Dax to 12,523.14 and a fall of 0.26% in the Cac-40 to 5,203.79.

In parallel, euro/dollar was edging higher by 0.035 to 1.1891.

Basic resource companies were the weakest area of the market, with the Stoxx 600 sector gauge down by 1.45% to 427.19 after Chinese data released overnight revealed industrial production slowed to a 6.0% clip year-on-year in August after a print of 6.4% in the month before.

In particular, Julian Evans-Pritchard at Capital Economics pointed out how spending on infrastructure in China was now slowing after being front-loaded earlier in the year, ahead of the next Communist Party Congress.

Regarding the BoE decision, economists were expecting a more 'hawkish' tone from the Monetary Policy Committee but no change in any of the main policy settings. The vote to stay put was seen unchanged from the last meeting at 7 to 2.

Back in Europe, Paris-based OECD revised its forecast for French GDP growth in 2017 from 1.3% to 1.7% but called for further reforms in order to maintain then current levels of social protection in the country, boost jobs growth and ensure the sustainability of the public finances.

Harmonised French consumer prices advanced at a 1.0% year-on-year clip last month, according to INSEE, confirming a preliminary reading.

Similarly, ISTAT confirmed that consumer price gains in Italy accelerated from a 1.2% clip in July to 1.4% for August.

Still on the economic calendar for Thursday were two speeches from European Central Bank governing council member Yves Mersch, at 1245 BST and 1800 BST, respectively.

Later in the day, in the US, the Bureau of Labor Statistics was scheduled to release its August inflation report at 1330 BST.

Munich Re was trading lower after discloing that it might its profit targets for the current financial year as a result of hurricanes Harvey and Irma.

Austria's Niki Lauda said he would table a €100m bid for part of defunct airline Air Berlin's assets alongside Thomas Cook's German unit, Condor.

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