Europe midday: Stocks jump on news of trade talks, China stimulus

Stocks on the Continent are holding near their best levels of the session, helped by a cascade of market-friendly news out of China in the form of fresh economic stimulus and reports that top trade officials from the US and China were set to start formal talks on Monday.

Nevertheless, investors were also digesting a spate of very weak data out in the euro area as they waited on the release of the key monthly US jobs report later in the day, at 1330 GMT.

As of 1145 GMT, the benchmark Stoxx 600 was ahead by 1.26% or 4.21 points to 338.19, alongside an advance of 1.43% or 149.03 points to 10,565.10 for the German Dax and a rise of 1.79% or 325.37 points to 18,542.73 on the FTSE Mibtel.

Following the Chinese central bank's announcement overnight that it would cut the reserve requirement ratio for the country's lenders by 100 basis points starting from 15 January, it was shares of Basic Resources which were pacing gains in markets, with the corresponding Stoxx 600 sector gauge adding 3.07% to 390.88.

Oil&Gas shares were also on the up, with the corresponding sector sub-index adding 2.09% to 310.12 as Brent crude oil added 2.22% to 57.21 on the back of those fresh policy moves in China.

In parallel, officials in Beijing unveiled tax cuts and increased financing for businesses.

Meanwhile, in the Eurozone, IHS Markit marked down its services sector Purchasing Managers' Index for December from a preliminary reading of 51.4 to 51.2.

To take note of, according to Claus Vistesen at Pantheon Macroeconomics, the French PMI data contained in that survey was consistent with activity in the Eurozone's second largest economy screeching to a halt at the end of 2018 in the wake of the 'yellow vest' protests in Paris.

The latest euro area consumer price data also made for an interesting read, with Eurostat reporting a drop in the year-on-year rate of increase in CPI from 1.9% for November to 1.6% in December (consensus: 1.8%).