Europe close: Stocks slip amid weak economic data, inflation worries
European stocks slipped into the red after eurozone manufacturing data showed growth fell to an 18-month low in May, with orders down for the first time in nearly two years amid inflationary pressures.
In the background, investors were also watching events in the Russia-Ukraine war and keeping a wary eye on crude oil futures as well as central banks.
"It looks like investors remain much more cautious about chasing gain in equities, and if anything remain firmly averse to recommitting themselves to stocks as the outlook for growth and inflation continues to worsen;" said IG chief market analyst Chris Beauchamp.
"Remarkably, the 100 index is still, just, in positive territory for the year, compared to double-digit losses for the Dax and Dow, but it is unlikely to stay in that happy position."
The benchmark Stoxx Europe 600 index was down 1.04% to 438.72.
Germany’s DAX outperformed dipping just 0.33% to 14,340.47, but Spain's Ibex 35 dropped 1.18% to 8,747.2.
The euro gave abck 0.74% to 1.0655, partially due to recent more hawkish remarks from some Federal Reserve officials.
Government bond yields on the other hand headed higher with the yield on the 10-year German Bund up by seven basis points to 1.19%.
S&P Global's Eurozone manufacturing purchasing managers’ index declined to 54.6 from 55.5 in April. A reading above 50.0 indicates expansion while a reading below signals contraction.
New orders fell for the first time since June 2020 amid an ongoing supply crunch and prices pressures, with producers of many goods and raw materials lifting their prices again as energy prices surged.
The survey also found that business confidence was among the lowest seen over the past two years amid sustained concerns surrounding the outlook for prices, supply chains and demand.
Earlier, figures from Destatis showed that German retail sales fell more than expected in April amid higher prices. Retail sales fell 5.4% on the month versus expectations for no change.
In equity markets, DWS slid 5% as the German asset manager’s chief executive resigned just hours after police raided its offices in connection with a probe into allegations over greenwashing.
Iconic bootmaker Dr Martens shares rocketed 20% after it posted a surge in annual pre-tax profits, driven by a "very strong performance" in the Americas and Europe, the Middle East and Africa.