Europe open: Shares retreat ahead of US data

By Frank Prenesti

European shares opened lower on Wednesday, after the strong performance of the previous two days, as investors eyed US later in the day.
The continent-wide STOXX 600 index was down 0.31% in early deals, with all major bourses lower. Attention was on composite PMI data for UK and euro zone, and US private payrolls numbers.

“Stock markets are paring gains after a phenomenal rebound on Monday and Tuesday as two weeks of losses were wiped out in just two sessions,” said OANDA analyst Craig Erlam.

“It’s been a very impressive relief rally, albeit one aided by a rose-tinted interpretation of certain economic indicators and a terrible plunge in the weeks before. This isn’t the time to get carried away but it is understandable that we’re seeing some relief. It all hangs on whether the data is the start of a weakening trend or just a blip, as with the July inflation drop.”

Investors were also eyeing an OPEC+ meeting on supply following speculation of a large output cut in response to a dimming economic outlook and lower prices.

In equity news, struggling airline SAS gained after it reached agreements with 10 of its lessors representing 36 aircraft to amend the terms of existing lease contracts.

Tesco shares were flat after the UK supermarket giant said annual profit would be around the lower end of previous guidance, with significant uncertainties over its second half.

Reporting by Frank Prenesti at Sharecast.com

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