Europe: Stocks struggle on gloomy German data

[LONDON] Europe's stock markets struggled Wednesday, as investors digested downbeat German economic data and shrugged off gains in Asia and the US.

Frankfurt dropped 0.6 per cent as official figures showed that industrial orders in Germany fell back in December, the latest sign of a slowdown in Europe's largest economy.

The news also sent the European single currency diving to US$1.1380 - the lowest level since Jan 25.

Paris equities meanwhile slid 0.3 per cent. Outside of the eurozone, London stocks shed 0.1 per cent, with online supermarket Ocado tumbling after a warehouse fire.

"European equities are on the back foot after a surprise drop in German factory orders this morning added to signs that the region's strongest economy is struggling," said Oanda analyst Dean Popplewell.

"The euro has fallen to its lowest level outright in a fortnight on the news."

German factory orders were down 1.6 per cent month-on-month, federal statistics authority Destatis said.

However, there was some brighter news in the data as well. Excluding volatile large orders for items like aircraft there was a 3.5 per cent increase in new business.

But it was not sufficient to drive Frankfurt stocks into positive territory.

"December saw German factory orders decline at the fastest rate in six months, helping pile further misery on a eurozone which is clearly struggling amid global trade woes," added IG analyst Joshua Mahony.

"This recent phenomenon of a stuttering Germany is certainly more of a worry for eurozone growth.

"With Brexit uncertainty and US-led trade friction, this decrease in factory orders highlights the weaker demand" often associated with significant upheaval and uncertainty, Mahony said.

AFP