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European shares fall amid weak PMI data, ongoing Italian political uncertainty

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European shares are trading in the red Wednesday, as investor sentiment weakens following disappointing European PMI data. Ongoing Italian political uncertainty is also weighing on the markets, as is a lower oil price.

By 1305 BST, the EUROSTOXX 600 was 1.13% lower and the EUROSTOXX 50 was down 1.56%. Regional bourses were also weaker. The German DAX fell 1.65%, the French CAC lost 1.48% and the Spanish IBEX was 1.69% in the red.

PMI data disappoint

The preliminary release of the monthly Markit Purchasing Managers Index showed the composite euro zone index slipped to an 18-month low of 54.1 in May, down from April’s 55.1. The decline was broadly balanced between the services and manufacturing sectors.

“The May PMI brought yet another set of disappointing survey results,” said IHS Markit’s chief business economist Chris Williamson.

“It’s also becoming increasingly evident that underlying growth momentum has slowed compared to late last year, especially in relation to exports,” Williamsons said.

Activity in German and France both weakened notably in May from April, the data also show.

Stock moves

Against that weaker tone, there were some stock movers of interest.

Eni shares slipped 1.78% to €15.82, despite news that Deutsche Bank analysts had raised their price target on the stock to €18.50 from €16.50. The investment bank’s analyst Lucas Herrmann advised clients to buy amid the current broader Italian-market related weakness, in a research note.

And, feeling the impact of lower oil prices, Total shares fell 2.72% while Royal Dutch Shell shares lost 2.69%.

Euronext shares are also in the red, falling 5.27% to €52.15 following a downgrade to ‘sell’ from ‘neutral’ from UBS.

Marks & Spencer shares, meanwhile, were trading higher, despite releasing a disappointing earnings update reporting a 61% slump in full-year, pre-tax profits.

Barclays and Santander, however, were both trading lower amid reports the two banks are considering a tie-up. Barclays shares lost 0.71% while Santander shares were off 2.34%.

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