European shares were holding lower come midday after a sell-off in Asia as fears of a global slowdown resurfaced to hammer sentiment.
The pan-European Stoxx 600 index was down 0.67% at 433.57 after closing 1.3% higher during the previous session.
Germany’s Dax meanwhile was slipping by 1.08% to 14,022.56, while Italy’s FTSE Mibtel was 0.65% lower to 23,979.64.
In China, the Shanghai Composite fell 2.41% and Wall Street had gotten off to a poor start after Snapchat owner Snap Inc cut revenue and profits forecasts for June after the closing bell the night before, blaming the rapidly weakening economic environment.
Snap shares were plummeting 39% in early New York trading, hitting other stocks in the sector.
In the UK, official data showed government borrowing fell more than expected in April but remained above pre-Covid levels.
Borrowing fell by £5.6bn from the previous year to £18.6bn, coming in below analysts’ forecasts of £18.8bn and the Office for Budget Responsibility’s forecast of £19.1bn. Nevertheless, it remained above pre-Covid levels – up by £7.9bn compared to April 2019 – and was the fourth-highest April borrowing since monthly records began.
UK energy stocks were hit by a combination of broker downgrades and a report that Finance Minister Rishi Sunak had ordered a plan to be drawn up for a windfall tax on the sector to help with Britain’s spiralling cost-of-living crisis.
SSE and Drax were both down on downgrades by Citibank. British Gas owner Centrica also slumped 6%.
Tele2 plunged 8% after investment company Kinnevik sold a 7.2% stake in the telecoms operator.
Shares in UK postal carrier Royal Mail were down 3% after a downgrade to “sell” by Peel Hunt.
Norwegian advertising firm Adevinta surrendered early gains to edge lower by 0.5% despite posting a higher-than-forecast first-quarter core profit.
Further dampening the mood, S&P Global’s services sector Purchasing Managers’ Index printed below forecasts for May. The PMI printed at 56.3, which was down on April’s reading of 57.7 and below the consensus for 57.5.
