Europe midday: Shares turn negative as investors weigh US GDP, earnings

European shares turned negative at midday on Wednesday as investors looked waited for a raft of big US earnings and GDP data, amid continuing concerns over Covid-19 lockdowns in Germany and France.

The pan-European Stoxx 600 gave up early gains and was down slightly. The German DAX fell 0.46%, while the French CAC 40 declined 0.97% and the UK FTSE was down 0.32%.

US stock futures also headed south ahead of a big day in corporate earnings with Google owner Alphabet, Amazon, Apple and Facebook all set to report. US third quarter GDP is also scheduled for release.

The European Central Bank was set to meet on Thursday, with economists expecting it to indicate it is open to more stimulus measures, particularly in the face of a potential double-dip recession.

In Europe, France and Germany on Wednesday both announced new one-month lockdowns to fight the second wave of the Covid-19 pandemic. The UK government continued to dither, even as infection rates soared and deaths were on the increase, as a Cabinet minister insisted a total lockdown could be avoided.

“It remains to be seen if, now that Germany and France have re-imposed national lockdowns, the markets most recent bout of covid-19 panic will be set aside in favour of focusing on Tuesday’s presidential election. Or whether a virus hotspot like the UK still has the capacity to cause widespread alarm, especially amidst the growing calls for a nationwide ‘circuit breaker’,” said Spreadex analyst Connor Campbell.

“It will also be interesting to see how much of an impact this afternoon’s third quarter GDP data out of the US has on sentiment. Analysts are forecasting growth of 32% at the annualised rate, a huge swing from the 31.4% contraction suffered in Q2.”

In equity news, Royal Dutch Shell jumped 4% as the oil giant’s adjusted earnings of $955m came in well ahead of the $146m forecasts and the company announced plans to increase dividend payments.

Nokia shares slumped 15.5% as the telecom equipment maker cut its profit forecast and introduced a new structure.

Aircraft engine maker Rolls-Royce was on the back foot as its, falling 15% as the stock went ex-dividend.

BT Group climbed as the UK telecom lifted the low end of its profit forecast and suggested a return to dividends.

Lloyds Banking Group added 3% after the UK's largest domestic lender posted a forecast-beating quarterly profit, boosted by a mortgage lending boom.

Standard Chartered was weaker even after it posted a smaller-than-expected fall in third-quarter profit and lowered bad loan guidance as it considered a return to dividends at the full year stage.

Flutter Entertainment jumped 7.6% as its FanDuel Group unit has agreed a multi-year partnership to become the exclusive sports betting sponsor of Major League Soccer club DC United.

Shares in Irish dairy products producer Glanbia soared 10% as the company announced its intention to launch a €50m share buyback program.