Europe open: Shares slip as eurozone PMIs reveal rising prices

European shares slipped lower on Wednesday as investors fretted over eurozone business activity surveys showing rising prices for goods and services, fuelling inflationary worries.

The pan-European Stoxx 600 index was down 0.18%, with Germany’s DAX down 0.43% and France’s CAC 40 off 0.36%.

Eurozone business activity grew at the fastest rate for 15 years in June as the economy re-opened further from Covid restrictions and vaccine progress boosted confidence, said survey manager IHS Markit.

However, concerns over rising inflation in the region were heightened as prices charged for goods and services rose at an “unprecedented” with demand continuing to outstrip supply, it added.

“Despite firms taking on extra staff at the sharpest rate for almost three years, June saw a record rise in backlogs of work, a further near-record lengthening of supply chains and the increasingly widespread depletion of warehouse inventories,” IHS Markit said.

In equity news, shares in wealth manager Old Mutual rose as the company reported a broadly stronger performance for the first half of 2021 to date, as the spread of vaccinations allows for a recovery in the global economy.

Anglo American was up after that the value of rough diamond sales at its De Beers unit rose in the fifth sales cycle of the year. Fellow miners BHP and Royal Dutch Shell were both up on higher oil and commodities prices.

Phoenix Group stock was down as reinsurance giant Swiss Re cut its holding in the insurance firm by 6.6% by selling shares worth £437m.