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Europe midday: Shares slip on German, EZ data; Atos slumps

(Sharecast News) - European shares slipped into the red on Monday as weak German GDP and eurozone industrial production data hit sentiment, while a cash flow warning from French IT firm Atos also dampened the mood.

The pan-European Stoxx 600 index was down 0.38% at 474.96, with all major regional bourses higher. Trade volumes were expected to be thinner due to the Martin Luther King holiday in the US. Investors will also be keeping an eye on the annual corporate talkfest at Davos, Switzerland.

In economic news, the German economy contracted in 2023 as price pressures impacted economic activity, according to the first calculations of the Destatis, the country's federal statistical office.

Price-adjusted gross domestic product fell by 0.3% last year, marking the first contraction since the Covid-impacted year of 2020.

However, GDP was still 0.7% higher than than it was in pre-pandemic 2019 after 1.8% growth in 2022 and a 3.2% expansion in 2021.

Eurozone industrial production fell 0.3% in November on a monthly basis, as the single currency bloc continued to struggle amid inflationary pressures, according to official data published on Monday.

On an annual basis, industrial output fell by 6.8% in the eurozone and 5.8% in the 27-member European Union, the bloc's statistics agency Eurostat said on Monday.

The seasonally-adjusted eurozone trade surplus widened to €14.0bn in November, from €9.3bn in October. The non-seasonally adjusted trade surplus in the eurozone was at €20.3bn in November which compares to a €13.8bn deficit in November last year, beating the consensus €11.2bn.

In Asia, China kept a key lending rate unchanged, leaving the rate for one-year loans to financial institutions, or medium-term lending facility, at 2.5%.

Oil prices were lower after US military strikes on Yemen aimed at Iran-back Houthi militants who have been firing on commercial vessels in the Red Sea. Benchmark Brent crude was down 0.2% to $78.13.

In equity news, shares in Atos plunged by 14% after the French technology company warned that free cash flow would be slightly below its initial target for the second half of the year. It also named Paul Saleh as its new chief executive.

Reporting by Frank Prenesti for Sharecast.com

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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