Europe midday: Stocks erase early losses on the back of euro area PMIs

Stocks had reversed their earlier losses come midday, despite news of an increase in the number of COVID-19 cases in South Korea and even as the latest economic data underscored the disruptions to the global economy resulting from the coronavirus.

Investors were also managing to brush off news that talks in Brussels on the European Union's next seven-year budget remained deadlocked.

Overnight, South Korea reported 52 more confirmed cases for a total of 208 and the Chinese province of Hubei revised the number of new cases for 20 February higher by 220 to 631 to reflect an outbreak in one of its prisons.

The latter led some observers to highlight the concerns around the reliability of Chinese data.

"A rise in new cases of the coronavirus in China, as well as South Korea has prompted further weakness in Asia markets overnight, even as some Chinese factories restart operations, after their extended shutdowns," said CMC Markets UK's Michael Hewson.

As of 1315 GMT, the benchmark Stoxx 600 had reversed course and was 0.05% higher at 430.41, alongside a gain of 0.03% on the German Dax to 13,667.71, while Milan's FTSE Mibtel was up 0.09% to 25,103.38.

Shares of Sopra Steria continued to top gains on the Stoxx 600 after the information technology consultancy posted a 8.3% increase in full-year consolidated revenues to reach €4,434.0m, alongside a 32.5% jump in free cash flow to €229.3m.

Stock in Belgian telecommunications outfit Proximus was near the other end on the back of a fourth quarter net loss of €24m, as a voluntary redundancy programme weighed on its bottom line.

In the year earlier period, Proximus had clocked in with a €131m profit.

Shares of Moneysupermarket were the worst performing issue on the Stoxx 600, as analysts at Berenberg reiterated their 'sell' stance and told clients that the previous day's gains were overdone.

There was some unexpectely good news to be had on the economic front as IHS Markit's factory and services sector Purchasing managers' Indices revealed that the euro area economy was expanding at its fastest clip in six months in February.

IHS Markit's composite PMI for those two sectors rose from a print of 51.3 for January to 51.6 in February (consensus: 51.0).

Nonetheless, the survey compiler's chief business economist, Chris Williamson, cautioned: "However, the outlook remains highly uncertain, notably in respect to the potential for further disruptions to supply chains, travel, tourism and demand arising from the coronavirus outbreak. In particular, the widespread delivery delays seen in

February bode ill for production in March unless new deliveries can be secured."

A gauge for supplier deliveries in the UK told a similar story, revealing the biggest monthly slowdown since at least 1992.

Fir his part, European Central Bank chief economist Philip Lane told Bloomberg that the latest PMIs were in-line with the monetary authority's own forecasts.

However, the coronavirus definitely constituted a "downside" risk until it was contained, although its impact on the economy was expected to be V-shaped.