European stocks were a little weaker in early trade on Tuesday as investors mulled disappointing German factory orders data.
At 0845 BST, the benchmark Stoxx 600 index was steady at 458.23, while France’s CAC 40 and Germany’s DAX were down 0.3% at 6,550.78 and 15,610.28, respectively.
Figures released earlier by Destatis showed that German factory orders unexpectedly slumped in May amid weakness in the auto sector.
Factory orders fell 3.7% on the month following a 1.2% increase in April, missing expectations for a 0.9% rise. On the year, factory orders rose 54.3% in May following an 80.2% jump the month before and versus expectations for a 59.4% increase.
Compared to February 2020, a month before Covid-related restrictions kicked in, order intake in May was 6.2% higher. Compared to May 2020, which was “very badly” affected by the pandemic, order intake rose 54.3%.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: “This is a terrible number, even factoring-in the significant upward revision to the April data. The headline was depressed by a 6.7% month-to-month plunge in export orders, mainly due to weakness in demand from non-eurozone economies, down by 9.3%, while new orders to other eurozone economies slipped by 2.3%.”
He also pointed out that new orders fell by 3.7%, excluding major orders, the same as the aggregate headline, with weakness in the auto sector a key driver.
On the corporate front, Alstom slumped more than 7% after the French train maker said it expects significant negative cash flow this year.
Elsewhere, London-listed online supermarket Ocado rose after it said first-half losses narrowed as retail revenue rose during further Covid-19 restrictions in the UK. The pre-tax loss for the six months to the end of May was £23.6m compared with £40.6m a year earlier as group revenue rose 21.4% to £1.32bn.
