Europe open: Stocks a touch lower as solid earnings offset worries about China

LONDON (ShareCast) - (ShareCast News) - European stocks were a touch lower overall, with investors weighing up well-received earnings against a downbeat session in Asia and worries about the Chinese economy, as the Greek stock exchange reopened. At 0900 BST, the benchmark Stoxx Europe 600 index was up 0.1%, while France's CAC 40 and Germany's DAX were down 0.4%.

The Greek stock market opened down a whopping 23% on Monday as it reopened after five weeks of closure, with banks all sharply lower. Trading on the Athens stock exchange was suspended in June as part of capital controls imposed on Greece as it struggled to reach a bailout agreement with creditors.

"After a strong July, equity markets have started August slightly lower - with commodity stocks falling after Chinese manufacturing PMI disappointed as concerns on Chinese growth continue to weigh on the sector," said Rebecca O'Keeffe, head of investment at Interactive Investor.

"The Greek stock market has opened over 20% lower, with banking stocks limit down 30% as the effect of capital controls decimates the sector. The fear had been that after five weeks of forced closure, carnage on the reopen was likely - and that fear appears to have been confirmed. There are also increasing concerns that the Athens authorities are ill-prepared for such extreme moves in share prices," she added.

Asia experienced another negative session after the final reading for Caixin's China purchasing managers' index printed at 47.8 in July, which was below the preliminary reading and marked a two-year low. Analysts were expecting the index to rise to 48.3. In London, shares in HSBC rose after the bank's first-half profit beat expectations on the back of a strong performance in Asia. It also announced the sale of its Brazilian business to Banco Bradesco for $5.2bn.

Elsewhere, Intertek surged after posting a 16% rise in first-half pre-tax profit thanks to improved revenue momentum, margin progression and strong cash generation. The company also said it was on track to meet its full-year targets.

Commerzbank (Xetra: CBK100 - news) was on the front foot after it said net profit in the second quarter more than doubled amid rising revenue, while Heineken (Other OTC: HEINY - news) rallied after the brewer's first-half sales beat expectations.

Lloyds Banking Group nudged higher as it emerged the UK government has sold off more of its stake in the bank.