Europe midday: Bounce in stocks stalls after EU approves counter tariffs

Stocks are seeing a small bounce as investors wax hopeful that the worst scenarios will be averted on the international trade front.

Key in that regard, in an interview Goldman Sachs chief executive officer, Lloyd Blankfein, told Bloomberg News he believed the White House's tariff threats were a "bargaining strategy".

"That’s what you'd do if it was a negotiating position and you wanted to remind your negotiating counter-party of how much firepower you have [...] I don't think we're in a suicide pact on this, so I suspect we're not going to cause the economies to collapse," Blankfein said in an interview at the Economic Club of New York.

Nevertheless, a mid-morning announcement by Brussels formally approving a 25% tariff on €2.8bn-worth of US exports was enough for stocks to quickly cut their gains, although they later recovered.

Against that backdrop, as of 1323 BST, the benchmark Stoxx 600 was higher by 0.78% or 2.99 points at 386.21, alongside gains of 0.42% or 53.72 points to 12,731.71 for the German Dax and a rise of 0.35% or 18.76 points to 5,409.39 for the Cac-40.

News was generally light on the economic front on Wednesday, with investors focused on a panel discussion, including European Central Bank chief Mario Draghi and Fed chair Jerome Powell, scheduled for later in the day, at 1400 BST, in Sintra, Portugal.

Commenting on the European Commission's proposed measures, Oliver Rakau at Oxford Economics said: "The EU tariffs are well designed, targeting politically sensitive sectors that will grab media attention while doing close to no harm to Europe's economy.

"However, there is little evidence that they will succeed in discouraging another round of tariff hikes from the US. Higher US car tariffs look increasingly likely."

Also overnight, US trade advisor Peter Navarro had claimed that the US had the upper hand in trade talks with Beijing, prompting a skittish reaction from some traders.

In other news, Germany's Ministry of Finance reported a 2.7% rise in factory gate inflation in the country during the month of May (consensus: 2.5%).

For later in the session, at 1400 BST, Belgium's central bank was set to release its consumer confidence index for the month of June.

Stateside, investors would be keeping tabs on a speech by Federal Reserve chair, Jerome Powell, at 1430 BST and existing home sales figures in the States referencing the month of May, at 1500 BST.

On the corporate side of things, shares of Bayer were seeing slight gains after the chemicals giant announced it has sold €5.0bn-worth of new bonds to help finance its purchase of US rival Monsanto.

Engie was drifting lower following news that the European Commission had deemed its fiscal arrangement with Luxembourg 'unfair'.