Stock markets across the world trod water yesterday, with investor appetite sapped by a cocktail of low oil prices, disappointing Japanese stimulus, banking worries and recession fears.
Jaded European dealers took the Asian lead, causing London to dip on figures showing a post-Brexit contraction in the economy’s dominant services sector in July and stoking recession worries in the wake of the recent EU exit vote.
It took a slightly firmer trend on Wall Street, lifted by gains in Time Warner, Apple and Goldman Sachs shares, to help European markets off their lows.
“Stocks remain stymied,” Charles Schwab said in a note to investors.
There was mild optimism on the banking sector, helped by rising profits at UniCredit, Societe Generale and ING, but the macro-economic picture remained too uncertain for comfort.
Oil prices continued to hover near three-month lows, although they saw a modest rebound on sliding US motor fuel reserves, and “Japanese stimulus disappointment festered”, Charles Schwab said.
London’s FTSE 100 was down 0.2% at 6,634.40, The DAX 30 gained 0.3% at 10,170.21 and in 
Paris, CAC 40 dropped 0.2% at 4,321.08 at close yesterday.
Japan’s government on Tuesday unveiled details of a 28tn yen package that it hopes will kickstart growth in the world’s number three economy. 
But the plan fell short of market expectations as only a quarter of it is new spending.
Activity in Britain’s crucial services sector sank in July following the vote to leave the EU, a survey by the research Markit group showed, making a recession more likely.
July marked the first contraction since December 2012 and the strongest rate of decline since March 2009, and strengthens the case for a bank of England interest rate cut today, economists said.
Analysts at Capital Economist said, however, that any market impact will be muted unless the rate cut is accompanied by more “non-conventional monetary policy” measures, such as quantitative easing.
There was mixed news in the eurozone, where Markit’s Composite PMI for July came in at 53.2 points, up from 53.1 points in June. 
Current growth was supported by a strong showing in Germany, Europe’s biggest economy – but France continued to stagnate.
“Yesterday’s services slump seems a far more British, rather than european, phenomenon,” said Spreadex analyst Connor Campbell.
“The eurozone was just as miserly as the FTSE ... despite the fact that its own services PMIs were relatively solid.”
The lender’s London share price rallied over four per cent in value. Banking stocks elsewhere in Europe were mixed. Societe Generale rose after better-than-expected profits, but Commerzbank fell, also after results, along with Deutsche bank as sector-wide worries continued to weigh.
But share price rises in industrials Linde, RWE, Daimler and Siemens helped the Frankfurt exchange eke out a small closing gain.
Some Italian banking stocks rebounded from a meltdown earlier in the week on recapitalisation worries, led by Banca Popolare and BMPS.
Investors initially welcomed a sharply higher net profit figure from UniCredit, but sentiment soured as they looked at the report’s fine print, which included a weakening capital adequacy ratio.
Also in Milan, Fiat Chrysler shares surged over 8% following a press report claiming that the auto giant is talking to Samsung about selling its car parts unit Magneti Marelli.