Europe midday: Trade news boosts stocks, travel issues lead

Stocks are holding onto their early gains thanks to the positive headlines out overnight from the biannual phase-one trade deal review between Beijing and Washington.

Official statements from both sides said the two countries had reaffirmed their commitment to the phase-one trade deal following their video call.

"If the two powers can get past the various issues that have arisen of late and keep moving forward with trade negotiations then markets are likely to take a broadly positive view of the situation," was IG chief market analyst, Chris Beauchamp's take on matters.

Beauchamp also pointed out the recent rise in Wall Street's so-called 'fear gauge', the Chicago Board Option Exchange's VIX index, saying it might pave the way for a rude shock for equity investors in case of any missteps at their Jackson Hole Economic Symposium scheduled for Thursday and Friday.

As of 1227 BST, the pan-European Stoxx 600 was ahead 0.58% at 372.99, alongside a 0.67% advance on the German Dax to 13,154.65, while the FTSE Mibtel was climbing 0.83% to 20,280.03.

Travel and Leisure issues were pacing gains on the Stoxx 600, with a sub-index for the sector jumping 2.38% to 179.3, alongside gains for Technology stocks and lenders.

Among the former, shares of Accor, IAG and InterContinental Hotels Group were all posting big gains.

In related sector news, FinnAir and Qantas were both higher even after announcing plans for redundancies.

Germany reported 1,628 new Covid-19 infections on Tuesday, a close to four-month high.

Lawmakers in Berlin were set to discuss a possible extension of job-protection subsidies in the evening.

On the economic side of things, Tuesday's batch of reports was mixed.

According to the IFO Institute, German business confidence rose by more than expected in August, with its closely-followed gauge rising from 90.4 for July to 92.6 in August.

But some economists pointed to the smaller improvement this time around in firms' assessment of their expectations, saying that momentum was fading.

Separately, the country's Federal Office of Statistics revised its reading on gross domestic product growth for the three months to June from a quarter-on-quarter fall of -10.1% to -9.7%.