Europe midday: Stocks edge higher in cautious trading
Stocks are moving higher at the end of the week, albeit amid palpably cautious trading.
Echoing other traders on Friday, Michael Hewson at CMC Markets UK said: "European markets had a disappointing session yesterday, while US markets rallied modestly before giving up a good chunk of those gains heading into the close."
"That we haven’t seen any sort of follow through from last week's gains should be a bit of a worry and probably speaks to a wider concern that the current down move in stocks may not be quite over."
Strategists at Bank of America-Merrill Lynch were of a roughly similar view, pointing out that the previous week's $13.2bn of inflows into equities, reflecting a higher growth/higher rates backdrop, had not been reflected in other flows.
"[...] inflows to deflationary winners of tech, investment grade bonds, emerging market bonds/equities continues.
"Recent 5 months of lower US dollar & higher US bond yields rare (<10% of past 50-year history, Table 1, though v common in Emerging Markets); has coincided with bouts of inflation and/or market volatility...on average inflation rose 2ppt, equities fell 9% and volatility rose 22ppt; higher wages remains the obvious risk to investors; higher wages & peak profits/growth much less anticipated," they said in a research report sent to clients.
Against that backdrop, as of 1530 GMT the benchmark Stoxx 600 was up by 0.15% or 0.58 points to 380.92, alongside a rise of 0.19% or 23.87 points in the Dax and an advance of 0.88% or 197.17 points to 22,661.71 for the FTSE Mibtel.
Meanwhile, euro/dollar was off by 0.30% to 1.2291.
On the macroeconomic front, Eurostat confirmed that the rate of increase in consumer prices within the single currency bloc slipped from a 1.4% year-on-year pace to 1.3%.
Shortly beforehand, Germany's Ministry of Finance reported that the expansion in the country's gross domestic product slowed from the 0.8% quarter-on-quarter pace observed in the third quarter to 0.6%, as expected.
St.Gobain stock was higher as the construction products and innovative materials manufacturer posted a 16.7% jump in recurring net income to reach €1.63bn.
French auto parts supplier on the other hand was skidding sharply lower after reporting a 24% drop in net income to €380m on the back of negative exchange rate effects and from the impact of higher raw materials prices.
In Spain, all eyes were on Inditex, until recently that market's largest company in terms of market capitalisation, with shares moving sharply lower as analysts at Citi and JP Morgan slashed their target prices on the stock ahead of its 14 March full-year numbers, sending shares 6.36% lower to €25.19.
Citi cut its target to €36.50, saying "we forecast gross margin -120bp due to the FX pressure and the launch of the Spring/Summer collection in January."
To take note of, Swedish rival H&M had also come under severe pressure of late amid reports that short-sellers had amassed significant positions in its shares.