Europe midday: Shares come off lows, despite poor factory data

Stocks on the Continent have come off their session lows as investors digest a mixed bag of economic data, although otherwise the news-flow, especially from overseas, appeared to be supportive.

Critically, a key gauge of activity in the Eurozone's factory and services sector edged past forecasts for February, hitting a three-month high in the process, even as a sub-index linked to German manufacturing staged a surprise slump.

There was other positive economic news out, with Bloomberg reporting overnight that Washington and Beijing were working on various memorandums of understanding covering areas that ranged from agriculture or technology transfers and intellectual property to non-tariff barriers.

Commenting on the market backdrop, IG's Chris Beauchamp said: "Markets are becoming less sensitive to the fact that these talks are taking place, in some ways reflecting the weariness and scepticism that comes with each meeting that comes and goes.

"However, while stocks appear to be showing lower expectations, we are still seeing an underlying element of optimism as evident from the seven-month high for the Yuan against the dollar."

By 1206 GMT, the pan-European Stoxx 600 was dipping 0.12% to 371.02, alongside a 0.15% drop on the FTSE Mibtel to 20,273.47.

Germany's Dax however was faring better, adding 0.36% to 11,443.04, while Spain's Ibex 35 was adding 0.20% to 9,199.60.

Manufacturing PMI surprises to the downside on weakness in Germany, but Services PMI jumps

Otherwise, all eyes were on the latest and very closely-followed IHS Markit Purchasing Managers' Indices, as investors tried to better gauge how lasting the current slowdown might be and its extent.

Reassuringly, the survey compiler's so-called composite output PMI, which covers both services and manufacturing, rose from 51.0 for January to 51.4 in February, edging past forecasts for an increase to 51.3.

That was thanks to an unexpected pick-up in euro area services, for which the corresponding PMI jumped from 51.2 to 52.3 (consensus: 51.5), with Germany accounting for the surprise to the upside.

On the factory side of things on the other hand, the euro area PMI dropped from 50.5 to 49.2, which was significantly weaker than the reading of 50.3 that economists had been anticipating.

The German PMI was again the key driver, but this time to the downside, slumping from 49.7 to 47.6.

Shipping giant sees US-Europe trade spat on the horizon

Meanwhile, shares of shipping giant AP Moller-Maersk were down by over 10% guided towards lower-than-expected full-year profits on the back of slower growth around the world and trade tensions.

Significantly, the company's boss warned that even if Washington and Beijing reached an agreement on trade, the US was likely to then go after Europe.

Also in the corporate headlines on Thursday morning, according to the Journal, Deutsche Bank took a cumulative $1.6bn hit from a portfolio of municipal bonds which it sold in 2016.

Over in Spain meanwhile, Telefonica shares were on the move after the company reported better-than-expected revenues and operating profits.

French telecoms to construction conglomerate Bouygues was also bounding ahead on the back of its own full-year figures.