Europe midday: Stocks edge higher but basic resources drop

European stocks edged tentatively higher on Wednesday, but gains were limited amid weakness in the basic resources sector and lower oil prices.

At midday, the benchmark Stoxx Europe 600 index was up 0.5%, France’s CAC 40 was 0.7% higher and Germany’s DAX was 0.6% firmer.

At the same time, oil prices were under pressure again after data from the American Petroleum Institute showed an increase of 4.5m barrels last week. West Texas Intermediate was down 1.6% to $47.35 a barrel while Brent crude was 0.9% weaker at $49.50.

On the corporate front, Glencore was under pressure after it reported a 66% drop in first-half profit. Glencore’s results weighed on the broader mining sector, with the Stoxx 600 sub-index for basic resources down 0.9%, also hit by falling copper prices.

Advertising giant WPP was on the front foot after it reported a 12% increase in first-half revenue and lifted its full-year revenue forecast.

In macroeconomic news, data from Destatis confirmed that Germany’s economy slowed in the second quarter.

Gross domestic product grew at a quarterly rate of 0.4% and an annualised rate of 1.7%, down from 0.7% quarterly growth in the first quarter.

Meanwhile, investors continued to look to Federal Reserve Chair Janet Yellen’s speech at Jackson Hole on Friday for clues on the timing of an interest rate hike.

FXTM research analyst Lukman Otunuga said: “Uncertainty has enveloped the global markets this week with investor jitters intensifying as the lack of direction continues to send ominous warnings ahead of Friday’s Jackson Hole gathering.

“Investors should keep diligent this week as the increasing focus on Yellen’s speech may present a threat of creating explosive levels of volatility if market participants are left empty-handed on US rate hike timings.”

There are no further eurozone data releases of note due but in the US, existing home sales are at 1500 BST.

Societe Generale said it expects sales essentially flattened out at 5.55m units on an annualised basis in July.

“This is based on trends in the pending home sales index which leads re-sales by a month or two, and was little changed in June,” the bank said.