Europe midday: Markets tread water amid barrage of data

European stock markets were treading water on Thursday morning, with investors continuing to show caution amid a surge of incoming economic data while equity indices remain close to record highs.

By 1230 CEST, the Stoxx 600 was up just 0.14% at 510.71, with most major markets across the continent trading with small gains of up to 0.4%. The pan-European benchmark has been trading within a tight range over the past week after having reached another all-time closing high of 512.67 on 28 March.

It was a busy morning session for newsflow: a whole host of service-sector surveys were out across Europe on Thursday, showing that activity was stronger than expected in March; inflation in Switzerland fell to its lowest level in two and a half years; while producer prices across the eurozone declined more than predicted.

Meanwhile, minutes from a recent Riksbank meeting showed that Sweden's central bank expects to cut interest rate in "May or June". The minutes said: "The Riksbank’s updated forecast for the policy rate is expected to indicate a relatively high probability of a policy rate cut during the first half of the year and one or more further cuts in 2024.”

Data in keen focus

The Swiss Federal Statistical Office revealed that the consumer price index slowed to a year-on-year growth rate of just 1.0% in March, down from 1.2% in February and below the 1.3% expected by the market. This was the lowest reading since September 2021.

Eurozone producer prices dropped by 1.0% in February, accelerating after a 0.9% fall the month before and below the 0.7% decline expected by the market. This was the sharpest drop in producer prices since May 2023.

The second estimate of the closely watched HCOB eurozone composite purchasing managers' index was lifted to 50.3 for March, up from the initial reading of 49.9 and ahead of the February level of 49.2. The improvement was on the back of continuing strength in the services sector, with the services PMI rising to 51.5 from 50.2, making up for ongoing weakness in manufacturing, where the PMI fell to 46.1 from 46.5.

Meanwhile, the S&P Global UK services PMI dipped to 53.1 in March from 53.8 in February. This remained comfortably above the 50.0 mark that separates contraction from expansion and marked the fifth month of growth, but was still below the 53.4 consensus forecast.

Market movers

Mondi shares were 2% lower in London after DS Smith extended its deadline for the UK packaging group to make a revised takeover offer by two weeks. Mondi and DS Smith had tentatively agreed on a deal last month, only to be outbid by US rival International Paper last week.

Also in London, media group Future surged 14% as it reported a return to organic revenue growth in the second quarter, largely attributed to robust performances in Go.Compare, B2B sectors, and resilient magazine sales.

After an earlier fall, French luxury giant Kering swung into positive territory on the news it is spending €1.3bn on a historic building in Milan's fashion district, giving it one of the largest retail spaces in the city. The deal was thought to be the single largest asset sale in Italian real estate history.

Volvo shares were up 5% in Stockholm after the carmaker reported its best-ever month for sales in March, offloading 78,970 cars – a 25% increase on the year before.