Europe midday: Shares lower on weak oil price, German employment data

4th Jun 2024 11:53

(Sharecast News) - European shares were lower on Tuesday, after a weaker session in Asia as investors awaited a European central bank interest rate decision later in the week and eyed the results of India's general election.

The pan-regional Stoxx 600 index was down 0.7% to 516 in early deals with all major bourses lower. Data showing US factory activity had slowed also weighed on sentiment.

In India, there was a sharp equities sell-off as early vote counting trends suggested Prime Minister Narendra Modi's BJP-led alliance was likely to fall short of the landslide projected by exit polls. India's BSE index was down 7.32%.

Oil prices also slid, with Brent crude down 1.34% to under $78 per barrel as prices crashed to four-month lows on Monday after Opec+ nations revealed they would gradually phase out production cuts after September. West Texas Intermediate was 1.6% lower at $73 a barrel.

Oil majors BP, Shell, Eni, TotalEnergies, Equinor and Aker BP all declining on the news.

"Not helping matters was a fall in oil prices, as OPEC's surprise decision to start rolling back some of its production cuts before the end of the year hit the market," said AJ Bell investment director Russ Mould.

"News of slowing activity in US factories is a double-edged sword as it could provide the Federal Reserve with more room for manoeuvre on interest rates. Job openings data later today could reveal if a softening economy is being reflected in looser labour market conditions. Friday's non-farm payrolls release is also in focus as investors await the latest decision from the Federal Reserve next week."

Germany's DAX index fell 1.17% after official date revealed the number of people out of work in Europe's biggest economy rose more than expected in May.

The number of unemployed grew by 25,000 in seasonally adjusted terms. Analysts had expected that figure to rise by 10,000. The seasonally adjusted jobless rate remained unchanged at 5.9%.

On the equities front, British American Tobacco fell as the cigarette maker reported first-half underlying revenues and adjusted profits falling by low-single digits.

Deutsche Telekom fell as the company said it would raise its buyback volume after the German state lender KfW announced a €2.7bn stake sale on Monday.

Maersk rose as the Danish shipping group raised full-year profit guidance on the back of strong container market demand and higher freight rates on disruptions in the Red Sea.

Tritax Eurobox shares were up as Brookfield Asset Management said it was considering a cash bid for the logistics fund which owns warehouses and distribution centres in the Benelux region and Germany.

Online grocer Ocado slumped as it looked set to exit Britain's FTSE 100 index.

Reporting by Frank Prenesti for Sharecast.com