Europe open: Stocks waver as basic resources retreat

European stocks wavered in early trade, with basic resources under the cosh following disappointing results from Glencore and amid declining metals prices, as oil remained in the red.

At 0900 BST, the benchmark Stoxx Europe 600 index and France’s CAC 40 were up 0.1%, while Germany’s DAX was off 0.1%.

At the same time, oil prices were under pressure again after data from the American Petroleum Institute showed an increase of 4.5m barrels last week. West Texas Intermediate was down 1.8% to $47.26 a barrel while Brent crude was 1.5% weaker at $49.22.

Rebecca O’Keeffe, head of investment at Interactive Investor, said: “Equity markets are currently in a one step forward, one step back mode as investors struggle to work out what can drive markets further forward after the two month post-Brexit bounce versus the potential downside risks, including the possibility of a more hawkish Federal Reserve.

“Today's move is seeing European markets slightly weaker, driven by falling energy and commodity prices, with metal and oil prices lower on heightened concerns of oversupply.”

On the corporate front, Glencore was under pressure after it reported a 66% drop in first-half profit. Glencore’s results weighed on the broader mining sector, with the Stoxx 600 sub-index for basic resources down 1.2%, also hit by falling copper prices.

On the upside, advertising giant WPP was on the front foot after it reported a 12% increase in first-half revenue and lifted its full-year revenue forecast.

In macroeconomic news, data from Destatis confirmed that Germany’s economy slowed in the second quarter.

Gross domestic product grew at a quarterly rate of 0.4% and an annualised rate of 1.7%, down from 0.7% quarterly growth in the first quarter.

There are no further eurozone data releases of note due but in the US, existing home sales are at 1500 BST.