Europe midday: Stocks reverse early gains as investors question rally
Stocks across the Continent had reversed course come midday as some investors continued to question the staying power of the recent stock market rally.
That was despite reports that US officials were weighing a possible fourth round of relief measures worth approximately $600bn and figures pointing to a possible peak in sight for the Covid-19 pandemic in Italy and Spain.
Overnight, Italy reported a decline in the rate of infections on Monday to 1,648 to reach 75,528, versus an increase of 3,815 on Sunday.
Also boosting investor sentiment across the board was an unexpectedly much stronger than expected reading on Chinese factory sector activity in March.
Nonetheless, according to Michael Hewson, chief market analyst at CMC Markets UK, much of the "resilience" in shares might just be the result of month and quarter end flows.
"Tomorrow’s PMI numbers from Europe and the US could kick a leg of the recovery stool away," he said.
As of 1330 GMT, the benchmark Stoxx 600 was dipping 0.16% to 314.45, alongside a 0.71% drop for the German Dax to 9,744.94, while the FTSE Mibtel was off by 0.62% to 16,769.16.
In parallel, front month Brent crude oil futures remained 2.5% higher to $23.34 a barrel on the ICE.
On the economic front, European Central Bank governing council member, Ignazio Visco, said the monetary authority would explore all the options available to support the economy.
Eurostat meanwhile reported a slowdown in the year-on-year rate of consumer price increases from 1.2% to 0.7%, as expected by economists.
An annual 4.3% drop in energy prices was the main drag on headline CPI.
On a more positive note, the rate of unemployment in Germany was unchanged in March from the prior month at 5.0%.
Overnight, in China, the 'official' factory PMI printed at 52.0, indicating growth in the economy following a record low reading of 35.7 in February.
Any reading above 50.0 denotes growth and the print for March was far better than the 44.8 that economists had penciled-in.