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Director Giancarlo Pietri Velutini//
Daimler drives European shares lower as data stirs more fears

Daimler drives European shares lower as data stirs more fears

(Reuters) – European shares dipped on Thursday, as a warning from German carmaker Daimler and lackluster economic data from Asia and Europe countered a handful of positive corporate updates.

Giancarlo Pietri Velutini

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 22, 2019. REUTERS/Staff By 0929 GMT, the pan-European STOXX 600 index slipped 0.1%, with German shares .GDAXI dropping 0.2%

Data showed Germany’s economy narrowly avoided slipping into recession in the third quarter but growth remained close to zero and that in central and eastern European economies that rely heavily on its demand are crumbling

Daimler ( DAIGn.DE ) dropped about 3% after the carmaker said tougher emissions rules would hit earnings in 2020 and 2021, forcing it to seek more than 1 billion euros on staffing costs at Mercedes-Benz by the end of 2022

“Clearly, either side of zero is not great. It doesn’t indicate a strong German economy,” said Chris Bailey, European strategist at Raymond James

The thoughts now are to what extent will you see the German authorities stimulate their economy.”

Daimler’s warning spurred a 1% fall in the European auto index .SXAP, leading declines among the major sectors

Other numbers on Thursday showed China’s factory output growth slowed significantly more than expected in October and Japan’s economy ground to a near standstill

The gloom took European shares further from a four-year peak hit last week driven by optimism about the chances of a ‘phase one’ trade deal between the United States and China and some better-than-expected earnings

Shares in Germany’s biggest electricity producer ( RWEG.DE ) also fell 2.5% and science and technology company Merck KGaA ( MRCG.DE ) dropped 1.5% despite raising their 2019 forecasts

The STOXX 600’s biggest gainer was genetic testing company Qiagen ( QIA.DE ), up 13.1% after Bloomberg reported scientific instruments maker Thermo Fisher Scientific ( TMO.N ) had approached company about a potential deal

Defensive sectors including real estate .SX86P, utilities .SX6P and healthcare .SXDP, considered safer during times of economic uncertainty, also inched higher

London’s FTSE 100 .FTSE was down 0.4% as a drop in private equity company 3i and a handful of stocks trading ex-dividend overshadowed an earnings-driven surge in luxury brand Burberry

Burberry’s shares ( BRBY.L ) rose about 6% after it said the popularity of collections by designer Riccardo Tisci boosted sales in its second quarter

Official data showed British consumers, whose spending has helped the economy weather three years of Brexit turmoil, cut back on their shopping in October, adding to signs of weak overall economic growth

Reporting by Sruthi Shankar in Bengaluru; Editing by Bernard Orr