European shares slip as weak economic data heightens growth worries

June 1 (Reuters) – European shares gave up early gains on Wednesday as weak German retail sales and slowing factory activity in the euro zone fanned worries about economic growth amid record high inflation.

The pan-European STOXX 600 index .STOXX was down 0.3%, after gaining as much as 0.4% in early trading. The benchmark shed 1.6% in May as surging inflation stoked worries about aggressive central bank action.

German retail sales fell a more-than-expected 5.4% in April, data showed, while manufacturing growth in the euro zone slowed last month as factories faced supply shortages, high prices and a fall in demand.

“The price action we have seen this week in stocks is very much indicative of the overall uncertainty in the markets at present,” said Stuart Cole, head macro economist at Equiti Capital.

“Yesterday’s stronger-than-expected inflation figures from the EU re-ignited fears about how high interest rates might be raised generally. The key fear is that central bank actions will inadvertently induce recessions.”

Deutsche Bank economists raised expectations over European Central Bank policy tightening and expect 50 basis points increase in interest rates in September.

On the STOXX 600, declines in commodity linked stocks and tech outweighed gained in banks and consumer shares… More News here

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