Europe open: Stocks cheer services data, but trade worries remain a drag

Stocks on the Continent are in the process of recovering after an early swoon as investors digest a mixed bag of readings on the euro area economy, although otherwise the news-flow 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.

In terms of the market backdrop meanwhile, David Madden at CMC Markets UK pointed out to clients how the minutes of the US central bank's last policy meeting, which were released overnight, pointed to an end to the Fed's balance sheet reduction in 2019 and to interest rates remaining on hold for the next few months.

"Policy makers [in the US] are concerned about the economic slowdown in China and Europe," Madden explained.

As of 0924 GMT, the pan-European Stoxx 600 was dipping 0.09% to 371.14, alongside a 0.25% drop on the FTSE Mibtel to 20,251.53.

Germany's Dax however was faring better, adding 0.21% to 11,425.08, while Spain's Ibex 35 was adding 0.07% to 9,187.90.

There was other positive economic news out overnight, with Bloomberg reporting 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.

Manufacturing PMI surprises to the downside on weakness in Germany

Otherwise, all eyes were on the latest 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).

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 manufacturing PMI was especially weak, 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.