Europe midday: Stocks little changed as Eurozone deflation eases
European stocks were little changed as Eurozone deflation eased more than expected last month.
Eurozone consumer prices fell 0.3% in February, beating analysts' estimates for a 0.5% decline, and recovering from the previous month's 0.6% drop.
Eurostat's preliminary estimate on inflation was supported by an increase in services, food, alcohol and tobacco. Energy prices continued to weigh on inflation, but recovered slightly from January's slump.
The European Central Bank (ECB) on Thursday launches its €1trn quantitative easing programme to help bring inflation back towards its target of just under 2%.
"February’s continued fall in Eurozone consumer prices and the still high rate of unemployment in January confirm that the ECB faces an uphill battle against the threat of deflation," according to Jennifer McKeown, senior European economist at Capital Economics.
Another report from Markit showed its final reading on Eurozone purchasing managers index (PMI) for manufacturing activity was confirmed at 51 in February, holding above the 50 level that indicates expansion.
The euro rose 0.25% to $1.1224.
In the UK, Markit’s manufacturing PMI jumped to a seven-month high of 54.1 in February, up from 53.1 in January. Analysts had expected a reading of 53.4.
Another UK report from the Bank of England revealed UK mortgage approvals were slightly higher in January than a month ago. January saw 60,789 mortgage approvals, up from December's 60,300 and a four-month high.
In China, HSBC’s manufacturing PMI was unexpectedly revised to 50.7 in February from 50.1.
The data came as China’s central bank cut interest rates, driving stock indices higher across the region on hopes that Beijing will take a supportive stance on ensuring growth.
The People's Bank of China (PBoC) cut its benchmark interest rate by a quarter point for the second time in three months, to 5.35%, and lowered its one-year benchmark deposit rate by the same amount to 2.5%.
In the US later on, reports on personal consumption expenditure and manufacturing will be due.
Oil price fall weighs on energy stocks
A measure of energy stocks, including Tullow Oil and Royal Dutch Shell, slumped as oil prices fell after OPEC output in February exceeded its quota for a ninth month.
Brent crude dropped 2% to $61.935 per barrel at midday, according to the ICE.
Vivendi SA declined after saying it plans to return about €5.7bn to investors after selling more than $30bn of assets. The French conglomerate sold a 20% stake in Numericable-SFR at a discount to Altice SA. Altice gained after Vivendi accepted its €40-a-share bid.
Lafarge SA declined following reports Holcim shareholders are urging the Swiss cement company to renegotiate the merger with Lafarge.
Intertek was a high riser after raising its full-year dividend 6.7% to 49.1p per share and saying it expects organic revenue growth rate to improve gradually during the year.