European shares stabilize amid fears of recession, despite positive results

European shares settled on Monday ahead of a slew of manufacturing activity data, as disappointing Chinese economic data raised fears of a global economic slowdown while erasing a jump in banking shares after strong HSBC results.

The pan-European Stoxx 600 index settled at 7:09 GMT, tracking the effect of the broader markets, with China’s official index of factory activity declining in July, and the Caixin service sector index missing expectations.

Adding to concerns, data showed that German retailers ended the first half of 2022 with the biggest drop in year-over-year sales in nearly three decades, pressured by inflation, conflict in Ukraine and the pandemic.

Investors are awaiting the release of factory production data from the eurozone at 0800 GMT, which may shed light on the pace of economic growth.

Shares of HSBC Bank in London rose 5.7 percent after it sought to attract investors by targeting higher profitability and positive expectations about dividends.