Europe midday: Markets subdued after Eurozone data, carmakers in focus

European stocks were restrained at lunchtime on Wednesday as analysts digested data from Germany and the eurozone, with deal news in focus as Fiat Chrysler and Peugeot agreed to a merger.

At 1207 GMT, the Stoxx 600 was 0.1% higher at 415.28, as Germany's Dax dropped 0.25% to 13,252.90 and the French CAC 40 edged 0.1% upward to 5,971.33. Meanwhile, London's FTSE 100 was up by 0.1% at 7,534.25.

IG analyst Joshua Mahony said: "European markets are failing to gain traction today, as markets take a breather following sharp gains last week. The US focus on impeachment proceedings does raise questions over exactly what the state of this trade deal would be if Trump is removed from office.

"While many believe such an eventuality is unlikely, the surge of support for such a move is certainly grabbing the attention of markets that has thus far largely ignored proceedings."

Data from Eurostat showed that headline Eurozone inflation accelerated, in line with estimates, to reach 1.0% in November, up from 0.7% in October, as core inflation climbed from 1.0% to 1.3%.

Pantheon Macroeconomics analyst Claus Vistesen said: "Looking to the December report as a whole, we think headline inflation will increase to about 1.3-to-1.4%, thanks to a jump in energy inflation, offsetting a setback in the core.

"For next year, we reckon the headline will average around 1.4%, which includes a trend in core inflation at 1.2%."

Meanwhile, the Ifo Institute's German business sentiment index climbed to 96.3 in December, outstripping an expected increase from 95.0 to 95.5.

Among individual stocks, Fiat Chrysler and Peugeot were both in the green after agreeing a $50.0bn merger, while Sweden's Volvo was also on the front foot after forming a commercial vehicles partnership with Japanese carmaker Isuzu.

London Capital Group analyst Jasper Lawler said: "These partnerships are a useful short-term alternative to mergers and acquisitions. We think this particular partnership probably has less scope to develop over time into a merger, but the chances are now clearly improved.

"Combining resources while keeping R&D costs lower and without the administrative headache of a merger makes sense to get ready for EVs."

French healthcare company Ipsen dropped after the resignation of chief executive David Meek, who will move on to head a unit belonging to Swiss drug company Ferring Pharmaceuticals.

Remy Cointreau fell after analysts at Berenberg slashed their price target for the spirits group from €124 to €116.