Europe midday: Shares flat as investors await Fed's Powell Congress testimony
European shares were still struggling for direction at midday on Tuesday as, despite positive comments from the European Central Bank chief on rising inflation and a rally on Wall Street overnight.
The pan-European Stoxx 600 was flat as investors still fretted over a more hawkish tone from the US Federal Reserve over the pace of inflation rises and timing of possible interest rate rises.
However, investors took some comfort from remarks by ECB President Christine Lagarde, who on Monday said the euro zone and the US were “clearly in a different situation”.
Eyes will be on a series of speeches from Fed officials this week, starting with Chairman Jerome Powell, who is due to speak before the US Congress on Tuesday at 1800 GMT.
In prepared remarks released ahead of his testimony today, Powell reiterated that the Fed was not unduly concerned that high inflation readings were permamnent.
“[As] transitory supply effects abate, inflation is expected to drop back toward our longer-run goal,” he was expected to say.
Oil prices rose on supply concerns, with BP and Royal Dutch Shell shares rising as a result.
In equity news, shares in Irish building materials group Kingspan topped the Stoxx, up almost 5%, after reporting that first-half profit and sales are set to be ahead of the previous year and 2019 as the momentum reported in April has continued into the second quarter.
Melrose Industries gained after the turnaround specialist said its signs of recovery were in sight for its GKN aerospace division and it was also returning £730m in cash to shareholders from the sale of the Nortek business in April, with further payouts on the way.
DS Smith fell after reporting that the current financial year had started well as the packaging company posted a sharp drop in annual profit caused mainly by higher costs and lower prices during the early stages of the Covid-19 pandemic.
UK commercial property landlords British Land and Land Securities were also higher on recovery hopes as the former confirmed plans to start construction on a new tower block in east London. Shopping centre owner Hammerson shares were up on a read across, as was housebuilder Beazley.
Shares in consumer internet company Prosus fell despite posting strong operating profit and revenues.