Europe close: Stocks end choppy session lower after German data disappoints

European equities eked mustered a late rally but ended a choppy session in the red, as investors mulled over disappointing German data and more signs that China’s economy is flagging.

The benchmark Stoxx Europe 600 index closed down 0.43%, while France’s CAC 40 fell 0.95% and Germany’s DAX lost 0.76%.

As of 1639 GMT, the euro was broadly flat against the yen and fell 0.27% against the pound but surged 0.85% against the dollar, while Brent crude gained 0.42% to $40.42 a barrel after a two-day slump.

“Coming off the back of today’s US dollar weakness and a rebound in UK commodity stocks, this afternoon’s spike in crude prices is a welcome reprieve for indices that are following oil prices higher,” said IG’s market analyst Joshua Mahony.

German data disappoints

On the macroeconomic front, figures released earlier by the Federal Statistics Office showed seasonally-adjusted exports in Germany fell 1.2% in October, while imports dropped 3.4%.

Both falls were a lot sharper than expected.

“It is too early to make any predictions on net exports in the fourth quarter, but the renewed fall in oil prices indicate import deflators will play tricks with the data again,” said analysts at Pantheon Macroeconomics.

“Even if nominal imports fall, real imports likely will be boosted by falling import prices due to weakness in oil prices.”

Meanwhile, according to data released by the National Bureau of Statistics, China registered its 45th consecutive month of producer-price deflation.

Producer prices in the world’s second largest economy declined 5.9% year-on-year in November, in line with the decline registered in October and slightly better than the 6% drop analysts had expected.

Meanwhile, the consumer price index rose 1.5% year-on-year last month, beating expectations for a 1.4% gain and up from the 1.3% advance recorded in October.

In company news, German chemical and pharmaceutical company Bayer fell 1.64% after European and US drug safety agencies said they were investigating whether a drug trial was affected by a defective blood-clotting test device.

Oil refiner Neste slid 1.91% after warning that a technical issue at its Porvoo refinery in Finland would lead to a production loss of tens of millions of euros.

Volkswagen rose 6% following reports that investigations by the company have shown it understated carbon dioxide emissions in fewer cars than originally thought.