Europe open: Equities in the red on the back of weak Asia data

LONDON (ShareCast) - (ShareCast News) - European stocks fell in early trade, taking their cue from downbeat sessions in the US and Asia following a strong US jobs report and weak economic data out of China and Japan. At 0845 BST, the benchmark Stoxx Europe 600 index was down 1%, France's CAC 40 was 0.9% weaker and Germany's DAX was down 0.5%.

"Just when investors though it was safe to get back in to the market, weak Chinese data has sapped confidence once again," said Mike McCudden, head of derivatives at Interactive Investor. "Furthermore, with a raft of data releases lying in wait today, investors may be well advised to head for the sidelines. However, more evidence of a weakening Asia may dissuade the Fed from being too hasty with a rate hike and offer investors some scope to buy on the dips." Stocks in Asia ended lower after figures showed core machinery orders in Japan - a key indicator of capital expenditure - fell 3.6% in July, compared with expectations for an increase. In China, the producer price index dropped 5.9% in August, its biggest fall since 2009 and an indication that deflation remains a risk.

The consumer price index rose to 2% in August from a year ago.

Over on Wall Street, meanwhile, a report showing a jump in job openings in July reignited fears of a rate hike in September.

In corporate news, shares in supermarket retailer Wm Morrison slumped after it posted a drop in underlying first-half pre-tax profit as revenue declined on the back of price cuts. The company also warned that the turnaround would take time. Pre (Shanghai: 600048.SS - news) -tax profit for the half year to 2 August fell 35% to £117m in the same period last year, missing market expectations, while total sales were down 5.1% to £8.1bn.

On the upside, clothing retailer Next (Other OTC: NXGPF - news) rallied after reporting a 7.1% jump in interim pre-tax profit, with revenue up as the company sold more items at full price than it had expected.

On the economic front, US initial jobless claims are due at 1330 BST, along with the import price index, while wholesale inventories are at 1500 BST.