European stocks were flat to slightly weaker in early trade on Tuesday as investors mulled the latest German industrial production figures.
At 0910 BST, the benchmark Stoxx Europe 600 index was down 0.1% at 474.77, Germany’s DAX was 0.2% lower at 15,904.34 and France’s CAC 40 was flat at 6,744.2.
Data released earlier by Destatis showed that German industrial production rose more than expected in July as the country overcame supply shortages.
Industrial production was up 1% on the month following a 1% decline in June, and versus expectations for a 0.8% increase. On the year, meanwhile, output rose 5.7% in July following a 5.4% increase in June, coming in ahead of expectations of 5.1% growth.
Compared with February 2020, the month before coronavirus restrictions were imposed in Germany, production was 5.5% lower.
ING economist Carsten Brzeski said: “After a disappointing second quarter, industrial production has finally offered some long-expected signs of life.
“Remember that, despite a lifting of restrictions around the world, German industrial production disappointed in the second quarter, dropping every month between April and June. Supply chain frictions such as the blockage in the Suez Canal and semiconductor delivery problems affected key sectors of German industry and more than offset the positive impact from lifted restrictions.
“Supply chain frictions have not disappeared but at least in July, the pipeline pressure from filled order books and low inventories was simply too strong not to see industrial production surging.”
On the corporate front, Deutsche Telekom gained after it agreed a share-swap deal with Softbank to lifts its stake in US unit T-Mobile and sold its Dutch unit.
Elsewhere, Allianz was trading a touch lower after Reuters reported that regulators have launched an investigation into the company following the demise of some of its US investment funds.
