Europe midday: Weak EZ, China survey data his sentiment as Stoxx falls

2nd Sep 2024 11:22

(Sharecast News) - European shares opened lower on Monday as investors continued to digest US inflation figures released at the end of last week along with weak manufacturing survey data from the eurozone and China, while trade was expected to be subdued with US markets closed for the Labor Day holiday.

The pan-regional Stoxx 600 index was down 0.38% to 523 after hitting fresh records last week.

The downturn across the eurozone's manufacturing sector continued in August, with the regional purchasing managers' index (PMI) remaining under the neutral 50-point level for the 26th month in a row as it came in at 45.8 last month, revised higher from the preliminary estimate of 45.6 to match the same level as in June and July.

Asian shares fell on the back of a weak China manufacturing survey reading over the weekend, although a private survey that covers smaller companies reported a return to growth.

The Caixin purchasing managers' index for the sector rose to 50.4 from 48.8 in July, coming in ahead of consensus expectations of 50.0.

In the US, the personal consumption expenditures price index - which is the Federal Reserve's preferred inflation metric - rose 0.2% month on month in July and 2.5% from a year ago. The print was in line with forecasts.

"Markets have limped into September, as equities throughout Asia and Europe drift lower despite all that the month promises to bring. The final week of August helped allay fears of a possible hard landing, with the second quarter GDP upgrade helping to dispel claims that we could be on course for a US recession," said Scope Markets analyst Joshua Mahony.

"With Goldman Sachs upgrading their third quarter GDP estimate to 2.7% over the weekend, it seems that claims of an impending sharp downturn may not be the central expectation within Wall Street."

"Today has seen a host of manufacturing data points released across Asia and Europe. However, it was the weekend manufacturing PMI release from China which rang alarm bells, falling to a joint eight-month low of 49.1. Whilst the improved Caixin manufacturing PMI reading highlighted improved fortunes for smaller Chinese firms, the sector clearly remains in a troublesome position as the country attempts to navigate its way out of the recent real estate fuelled slowdown."

In equity news, shares in online real estate agent Rightmove surged by a quarter as Australian real estate advertising company REA Group has confirmed speculation that it is considering a possible cash and share offer for the platform.

REA, majority owned by Rupert Murdoch's News Corp, said in a statement on Monday that it sees "clear similarities" between the two groups, but has not yet approached, nor had any discussions with, Rightmove regarding any potential offer.

Reporting by Frank Prenesti for Sharecast.com