Europe midday: China data, geopolitical worries keep shares in the red

by | Aug 16, 2021

The 10-day rally in European shares ended on Monday after Chinese data revealed a slowdown in factory output and retail sales growth.
The pan-European STOXX 600 index was down 0.51% at lunchtime, easing from record highs last week. Investors were also watching the sudden collapse of the Afghanistan government. Taliban insurgents over the weekend pushed their frontlines into the capital city of Kabul after a succession of shocking battlefield reversals, spurred by the exodus of U.S. and coalition forces.

Sentiment was hit by official data showing Chinese industrial production rose 6.4% on the year following an 8.3% increase in June, coming in below consensus expectations of 7.% growth.

Retail sales grew 8.5%, down from 12.1% growth in June and undershooting expectations for a 10.9% jump.

The news hit oil and mining stocks as commodity prices weakened on fears of faltering demand in the world’s major consumer of metals and oil. New Covid-19 outbreaks and floods disrupted business operations.

In equity news, French car parts supplier Faurecia topped the Stoxx after it agreed to acquire a majority stake in German automotive lighting group Hella, trumping rival bidders with a €6.7bn deal.

Hella, whose shares hit a record high last week on anticipation of a deal, slipped 3.45%.

Lufthansa fell 3.15% after the German government said it plans to sell up to a quarter of its 20% stake in the airline over the next few weeks.

Shares in publisher Future gained after the group said it had bought consumer media company Dennis for around £300m in cash from Exponent Private Equity.

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