Europe midday: Stocks hold gains ahead of UK budget

European shares maintained gains at midday on Wednesday as investors eyed new budget measures from the UK to help power the post Covid-19 pandemic recovery and shrugged off a survey that suggested the eurozone was headed for a double-dip recession.

The pan-European Stoxx 600 index was up 0.43% with London's FTSE 100 outperforming the market, rising 0.93% at 1208 GMT.

Germany's DAX was 0.97% higher on reports the government was considering a loosening of coronavirus restrictions.

Investors appeared unperturbed by a survey indicating the eurozone economy was on course for a double-dip recession as the coronavirus pandemic takes its toll.

The IHS Markit composite purchasing managers’ index - which measures activity in the manufacturing and services sectors - printed at 48.8 in February, up from the flash estimate of 48.1 and above January’s reading of 47.8, but still below the 50.0 mark that separates contraction from expansion.

In London, Finance Minister Rishi Sunak was set to unveil his budgetary response to the pandemic, with most major announcements already widely leaked by his department, including a five-month extension of the furlough scheme. Focus remained on action to help house builders, travel, pubs and the retail sector.

"A lot has been pre-announced (leaked), but we still expect the rabbit out of the hat moment - perhaps not immediate tax hikes, perhaps direct stimulus cheques for all (this works better than furlough) but that would be too much to ask," said Neil Wilson, chief market analyst at Markets.com.

"Sunak will display a total lack of imagination, Eat Out to Help Out mark II, for instance, more furlough and measures to stoke house prices, or the housing market, whatever way you look at it. Housebuilders are higher again today - if there is no extension of the stamp duty holiday they would pull back."

In equity markets, travel & leisure stocks were the top performers, with British Airways and Iberia owner IAG, Premier Inn owner Whitbread, Cineworld and Wetherspoons all higher.

In equity news, Micro Focus shares surged 14% after the software company said it had signed a commercial agreement with Amazon Web Services.

Shares in UK insurer Hiscox Ltd plunged 11% as it swung to a huge loss for 2020 and continued to withhold its dividend.

Persimmon was also up after the housebuilder said forward sales were 15% higher than a year ago as it reported an 18% decline in annual profit. Rivals followed suit, with Taylor Wimpey and Barratt up, boosted also by expectations the chancellor will announce in his budget a mortgage guarantee scheme to help people with smaller deposits and possibly the extension of the stamp duty holiday.