Europe open: Stocks flat after weak data from China and Germany

(Sharecast News) - European stocks opened broadly flat on Tuesday after weaker-than-expected economic data from heavyweight economies China and Germany dampened sentiment. The Stoxx 600 Index was down 0.05% by 1002 CET, with small gains in Madrid and Milan offset by mild falls in London, Paris and Frankfurt.

Germany industrial production was down 1.4% on the month, falling for the fourth straight month, dragged lower by a 5% drop in production in the automotive industry. The 1.4% slump followed a revised 0.1% decline in overall industrial production August and was well below the 0.1% fall expected by analysts.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said that Tuesday's data suggests a downward revision to the third-quarter GDP growth figures for Germany, with initial estimates already showing a 0.1% quarter-on-quarter contraction. "[This] is likely and bode ill for the last quarter of the year. The carry-over for Q4-if output holds steady at September's level-points to a near 1% fall in the fourth quarter and downside risks to our forecast for GDP to stagnate at the end of the year."

Meanwhile, Chinese exports dropped 6.4% year-on-year in October, slightly worse than the 6.2% decline in September but much worse than the 3.5% fall expected by analysts. However, imports were up 3% after a 6.3% drop the previous month, meaning the trade surplus fell to $56.5bn after a revised $77.8bn the month before.

The Eurozone producer price index is due out at 1100 CET, followed by trade figures in the US later on.

In company news, shares in UBS jumped 4% early on despite the Swiss banking giant reporting a net loss of $785m in the third quarter, down from a $1.73bn profit the year before and well below the $444m loss expected by analysts. Operating expenses almost doubled to $11.6bn in large part due to the integration of Credit Suisse. Revenue, however, was up 42% at $11.7bn and ahead of the $11.3bn expected by the market.

"Even though UBS posted a quarterly loss, the bank is taking great strides forward in its integration of Credit Suisse. To be able to recommit to ambitious targets laid out earlier this year has inspired confidence," said Max Georgiou, analyst at Third Bridge.