LONDON—Europe’s stock markets were down in mid-morning trading, led by the French stock exchange.

The CAC 40 in Paris fell 0.4 percent to 3,169.54, followed by the FTSE MIB in Milan, which was down 0.3 percent to 13,672.39.

The FTSE 100 in London and the DAX in Frankfurt both retreated 0.2 percent to 5,654.36 and to 6,542.74 respectively.

The euro traded at $1.22 while the pound traded at $1.56 at 11:40 a.m. CET.

Retail and luxury stocks were mixed, with the morning’s biggest gainers including Italian eyewear maker Marcolin, which rose 2.8 percent to 4.63 euros; the German retail and wholesale group Metro, which advanced 2.3 percent to 20.89 euros; and Mulberry Group, which was up 1.4 percent to 13.05 pounds.

Among the stocks that lost the most ground in mid-morning were Hermès International, which was down 2.1 percent to 225.55 euros; French Connection, which fell 2.4 percent to 20.50 euros; and Burberry Group, which retreated 1.6 percent to 12.09 pounds following a slowdown in first-quarter sales, reported last week.

The market declines came despite an upbeat forecast for the U.K. of falling inflation and rising consumer spending in the second half.

The Ernst & Young Item Club said in its latest quarterly forecast that the second half in the U.K. could see a slight uptick: Overall growth will remain flat for 2012, but the economy is set to grow in 2013 and beyond.