Europe midday: Stoxx lower as Trump trade war fears spook investors

(Sharecast News) - European shares trimmed morning losses after the post-US election bounce ran out of steam.

The pan-regional Stoxx 600 index was down 0.77% at 507.08 with all major bourses in the red as traders took profits and looked more closely at the possible impact of potential tariffs against China as promised by president-elect Donald Trump.

"Sentiment seemed patchy across the board as investors continued to spend time digesting the implications of a Trump administration," said Russ Mould, investment director at AJ Bell.

"Despite the initial excitement upon the election result last week, investors are starting to realise that Donald Trump's ideas could drive up inflation, make life tough for foreign companies selling into the US, and raise geopolitical risks. It creates the kind of uncertainty which markets hate."

In economic news, wage growth in the UK slowed in the three months to September, but not as much as expected, according to official data.

Employee pay excluding bonuses rose 4.8% over the quarter, its lowest rate in more than two years. Meanwhile the unemployment rate rose to 4.3% in the three months to September from 4% in the previous quarter, versus expectations for a 4.1% increase.

In Germany, inflation was confirmed as rising to 2% in October from September's 1.6%, driven by higher food and services prices.

On the equities front, shares in ConvaTec surged as the wound care specialist raised its guidance for 2024 following robust sales growth across its divisions.

BAE Systems rose as the arms maker held annual guidance and said its order book reflected demand from governments for weaponry amid increasing global tensions. The company said it expected to hit its upgraded underlying operating earnings growth target of 12 -14% this year on 2023's £2.7bn.

DCC shot higher as it announced plans to simplify its operations and focus on the energy sector. The sales, marketing and support services group also reported a rise in interim profit and lifted its dividend.

Shares in Drax also jumped on a positive trading update.

On the downside, shares in Bayer slumped as the German chemicals group lowered full-year operating earnings guidance and took billions in write-downs on agricultural markets in Latin America.

Direct Line was knocked lower by a downgrade to 'hold' from 'buy' by Jefferies, which cut its price target to 165p from 235p. The insurer on Monday said it was axing 550 staff in an effort to cut costs.

Reporting by Frank Prenesti for Sharecast.com