Europe midday: Markets rise amid Sino-US optimism, strong PMI data
European stocks were higher at lunchtime on Wednesday, as reports suggested Sino-US trade negotiations are making progress and investors digested data from China and the Eurozone.
At 1155 GMT, the Stoxx 600 was 1.0% higher at 402.40, as Germany's DAX climbed by 1.1% to 13,125.20 and the French CAC 40 jumped by 1.3% to 5,800.27. Meanwhile, London's FTSE 100 was up by 0.2% at 7,174.49.
Bloomberg cited sources familiar with negotiations as stating that Washington and Beijing were closing in on a phase-one deal despite tensions over Hong Kong and Xinjiang.
This news appeared to contradict comments made by US President Donald Trump in London on Tuesday, which had sparked fears that a deal might not be reached until November 2020.
Oanda analyst Craig Erlam said: "It still baffles me that investors hang on every Trump statement and tweet. His trade deal optimism changes on a near-daily basis and yet, investors are very sensitive to it. It's probably a reflection of the relative lack of other talking points."
Investors were digesting data from Asia early in the session, after China's unofficial Caixin services purchasing managers’ index (PMI) climbed to 53.5 in November from 51.1 the month before, beating an anticipated reading of 51.2 and marking the fastest expansion since April.
Zhong Zhengsheng, director of macroeconomic analysis at Caixin Global affiliate CEBM Group, said: "China’s economy continued to recover in November, as domestic and foreign demand both improved. But business confidence remained subdued, reflecting the impact from uncertainties generated by the China-US trade conflicts. That will restrain a recovery in economic growth."
Meanwhile, the eurozone Markit composite PMI beat an earlier flash estimate that it would remain flat at 50.3 as it inched upward to 50.6 in November.
Pantheon Macroeconomics analyst Claus Vistesen said: "In short, EZ PMI data are mixed, but remain soft overall. Output growth in services was once again the key driver of overall activity, though the pace slowed a bit, while the rate of contraction in manufacturing easing.
"New orders to the private sector as a whole were unchanged on the month, reversing declines in the two past months, with demand in the domestic economy offsetting still-slowing external demand."
Among individual stocks, Airbus made gains after winning an order from US-based United Airlines for 50 new long-range passenger jets.
Swedish industrial group Trelleborg climbed after it announced plans to slimline its operations to three business areas as it launched a strategic review.
Infineon and STMicroelectronics both rose after a positive update from fellow chipmaker Microchip Technology.
Orange was in the red after its dividend outlook failed to meet expectations, though the French telecoms operator also announced plans to organise its European mobile mast operations into a separate company.