Europe midday: Stocks marginally higher as eurozone economic sentiment rises

European stocks were marginally higher on Thursday as investors digested US President Donald Trump's latest tax plans and growing signs that the eurozone recovery may be gathering pace.

The pan-Europe Stoxx index was almost flat at midday, but Germany's DAX and France's CAC were both moving north halfway through the session.

The DAX gained 40 points to 12700 for the first time in three months, while the CAC, was closing in on the 5290 mark to near its own seven week peak.

In London, stocks were still hovering around the flatline by midday on Thursday, failing to make any headway as the pound popped higher following a brief dip in the wake of dovish comments from Bank of England governor Mark Carney.

European stocks were boosted by news that the eurozone's economic sentiment index (ESI) rose to 113.0 in September from 111.9 in August with the last three months’ average for the ESI reaching 112.1, the highest level since 2007.

The Greek ESI was up +1.6 to 100.6 - the first time it had moved beyond 100 since the end of 2014.

Analysts at Berenberg said Greece seemed to profit from the much reduced risk of a 'Grexit' after the conclusion of the second review of its EU bailout in June and a very strong tourism season.

Spreadex's Conor Campbell said there would be more for investors to work with in the second half of the session.

“Not only is there the ongoing reaction to Trump’s tax proposals, but the final Q2 GDP reading for the US and a speech from FOMC member Stanley Fischer. That growth figure is set to remain unchanged at 3.0% (at the annualised rate), though any upwards revision would give the dollar yet another reason to be cheerful this week,” he said.

On the corporate front Swedish fashion chain H&M fell as it reported a 20% fall in net third-quarter profits and warned that online shopping was hitting sales at its stores. The retailer had been forced to discount its summer collection in an effort to lift revenues.
In London, Imperial Brands were in the red as the cigarette manufactuer confirmed it was in talks to help rescue UK tobacco supplier Palmer & Harvey and said it expected to deliver strong growth in full year revenues and earnings at actual currency rates.

TUI AG was down after the travel operator said recent hurricanes had affected its Caribbean operations. The company, however, still backed its 2017 fiscal guidance and said the summer 2017 season is closing out almost fully sold at 97%.