Europe midday: Shares in downbeat mood despite strong Wall St

(Sharecast News) - The ebullient close on Wall Street and a fall in UK inflation to 2% for the first time since 2021 failed to inspire European markets on Wednesday with shares sliding lower. The pan-regional benchmark Stoxx 600 index was down 0.13% at 514.36 points after gains in the previous session. Britain's FTSE 100 was up 0.04% to 8,195, France's CAC 40 fell 0.60 to 7,577 and Germany's DAX 0.02% to 18,088.

"Another relatively unimpressive start for European markets has seen the FTSE 100, DAX and CAC all trading lower in early trade. This represents a continuation of the selling pressure that has dominated the past month, with the FTSE 100 and DAX both 3% lower over the period," said Scope Markets analyst Joshua Mahony.

"The French CAC once again finds itself at the bottom of the pile, with Goldman Sachs warning that a Le Pen victory would see the country's debt burden swell to the highest level since 1950. The plan to increase public spending and lower taxes may sound great to the electorate, but such a move would likely cause shockwaves through the financial system."

Annual UK consumer price inflation fell to 2% in May from 2.3% in April, in line with expectations, according to figures released on Wednesday by the Office for National Statistics.

It marked the first time inflation has hit the Bank of England's target since July 2021 and leaves the door open for a potential rate cut from the BoE this summer. Inflation peaked at 11.1% in October 2022, hitting its highest level since 1981.

In other economic news, eurozone construction output fell 0.2% in April 2024 compared with the prior month, according to flash estimates from Eurostat, the statistical office of the European Union.

Across the broader EU output was up 0.2%. On an annual basis April production fell by 1.1% the euro area and by 0.9% in the EU.

The BoE meets on Thursday with no change in policy expected.

Traders expect a quieter back end to the trading session with US markets closed for the Juneteenth holiday.

In equity news, the head of Spain's antitrust watchdog said on Tuesday the government could place extra conditions on BBVA's €12bn takeover bid for Sabadell. Shares in both banks were fell on the news.

Warhammer maker Games Workshop surged as the company posted an upbeat trading statement.

Spectris slumped by as much as 10% at one point as the precision instrumentation and controls group said full-year profits would miss current market forecasts as a result of weaker-than-expected demand at its lab equipment division in the first half.

UK homebuilder Berkeley fell despite lifting its earnings outlook by 5% for the current fiscal year.

Vodafone gained as the telecoms operator said it had raised around $1.83bn from the sale of a stake in India's Indus Towers that it said would be used to repay some of its lenders.

Reporting by Frank Prenesti for Sharecast.com