Europe midday: Stocks edge higher despite trade headwinds

European stocks edged higher in early trade on Wednesday, underpinned by a solid performance from the basic resources sector, as investors apprehension around global trade talks eased a bit, although many analysts remained quite cautious.

"China can afford to play a much longer game, particularly when it comes to the US electoral cycle. President Xi will be around long after Donald Trump has departed the White House. China's economy may well be slowing down, but it is still growing at a decent pace, and the Chinese could make it very difficult for US companies operating in China by disrupting their supply chains, by implementing additional customs costs, or checks, with Apple being particularly vulnerable," said Michael Hewson, chief market analyst at CMC Markets UK.

At 1146 BST, the benchmark Stoxx Europe 600 index was up 0.12% or 0.45 points at 379.16, Germany's DAX was 0.34% or 41.80 points higher to 12,199.60 and France's CAC 40 was 0.33% firmer at 5,381.60.

Basic resources racked up healthy gains as copper prices rallied, with the Stoxx 600 sub-index for the sector up 1.68% to 438.80.

Despite the recent escalation in the trade spat between Washington and Beijing, some - but not all - economists were arguing that as long as the frictions remained a bilateral affair between the two economic giants, then the economic damage might remain modest.

On that note, there were reports that Canadian Prime Minister, Justin Trudeau, was coming under increased pressure from businessmen in his country to reach a deal with the US and Mexico on a revamped NAFTA accord.

On the other hand, and as a result of the trans-Pacific trade spat, Germany's IW economic institute lowered its forecast for German economic growth of 2.0% in both 2018 and 2019 to 1.8% and 1.4%, respectively.

There was also some good news on the geopolitical front, as North Korea said that it would close a key missile test facility and potentially destroy its primary nuclear complex if the US agreed to corresponding measures.

In corporate news, Germany's Schaeffler was on the front foot after leaving its guidance for overall sales this year unchanged.

Recruiter Adecco was in the red after saying it has seen a slowdown in growth in the third quarter, while Danske Bank tumbled nearly 8% as its chief executive officer Thomas Borgen resigned after the bank found indications that its Estonian brand was used for money-laundering purposes.

London-listed B&Q and Castorama-owner Kingfisher slumped after posting a 15% drop in first-half profit on the back of a poor performance from its French business.

Construction sector output in the euro area slowed to a 0.3% month-on-month pace in July, following a rise of 0.7% in June, while the year-over-year rate fell a touch to 2.6% from an upwardly-revised 3% in June, Eurostat said.

In parallel, the European Central Bank reported that the Eurozone's current account surplus fell from €24.0bn for June to €21.0bn in July.

For the last 12 months, the bloc's surplus stood at €394.0bn or 3.5% of gross domestic product, versus 3.3% in June, while portfolio flows to outside the euro area held up at €474.0bn.

Still ahead on the economic calendar, European Central Bank President, Mario Draghi, was set to deliver a speech at the Jacques Delors Institute in Berlin, at noon.