Europe open: Stocks waver as investors mull weak German data

European stocks wavered in early trade as investors digested some disappointing German data and looked ahead to Thursday’s rate announcement from the European Central Bank.

At 0850 BST, the benchmark Stoxx Europe 600 index and France’s CAC 40 were down 0.1%, while Germany’s DAX was flat.

At the same time, oil prices advanced. West Texas Intermediate and Brent crude were up 1% at $45.26 a barrel and $47.73, respectively.

On the macro front, data from Destatis showed German industrial output fell 1.5% on the month in July, which was the biggest decline since August 2014. Economists had been expecting a 0.2% increase.

Pantheon Macroeconomics said the figures were “ugly but also likely tainted by Brexit”.

“Even with the upward revisions of the June data, this is a poor report which suggestthat German manufacturing fell out of bed in the beginning of Q3. It is reasonable to assume that Brexit was a key contributor to the decline, but we won’t know until we see whether month-to-month output rebounds next month; we think it will.”

In corporate news, Volkswagen was in the black following a media report the car maker was in advanced talks with China Anhui Jianghuai Automobile to produce electric vehicles.

Industrial equipment rental company Ashtead Group rallied after it said revenue increased as it benefited from weak sterling in the first quarter, while it expects full-year results to be ahead of views.

On the downside, Air France-KLM, EasyJet and Lufthansa flew lower as Deutsche Bank downgraded its outlook for the stocks.

Sports Direct tumbled after it said it expects earnings to fall 21% this year but added that, contrary to much media speculation, founder Mike Ashley was not planning to take the company private any time soon.

Housebuilder and property developer Barratt Developments was weaker as it said total completions in the year to the end of June rose 5.3% to 17,319 and revenue rose 12.7% to £4.24bn, with profit from operations up 15.9% to £668.4m.

Hargreaves Lansdown was also in the red despite the investment management firm reporting a jump in full-year profit as asset under administration grew. The company also announced on Wednesday that its chief executive Ian Gorham was stepping down.

Shares in payments processor Worldpay slumped as it emerged that private equity firms Advent International and Bain Capital LLP sold a bigger-than-expected stake in the company through their Ship Global 2 & Cy SCA vehicle.

More broadly, investors were looking ahead to Thursday’s ECB announcement, although President Mario Draghi is expected to leave rates unchanged.