Europe midday: Stocks recover from early dip, trade talks and China in focus

Stocks on the Continent are recovering from early selling amid mixed news around US-China trade talks.

On Saturday, the US President said it was "false" that America might soon lift its tariffs on Chinese-made goods, although his remarks had a positive edge in overall terms, with Donald Trump going on to say that "[negotiations are] going well. I would say about as well as it could possibly go."

At the least, analysts appeared to retain a positive bias, with Michael Hewson, chief market analyst at CMC Markets UK, telling clients: "There appears to be much more cautious optimism than we saw at the end of 2018, helped in some part by a more cautious Federal Reserve, while corporate earnings, despite not being great, they haven't been particularly disappointing either."

On a similar note, on Friday, strategists at Bank of America-Merrill Lynch said: "we thus remain tactically bullish on risk asset prices, forecast more winter upside, e.g. S&P500 to 2750."

As of 1153 GMT, the benchmark Stoxx 600 was down by 0.25% or 0.85 points to 356.20, alongside a drop of 0.42% or 46.48 points to 11,158.69 on the German Dax, while the FTSE Mibtel was giving back 0.64% or 125.80 points to 19,583.74.

To take note of, US markets were to remain closed on Monday, in observance of the Martin Luther King Jr. holiday.

Nevertheless, investors appeared to be overlooking a better-than-expected batch of economic data out of China, with GDP growth printing at up by 6.5% year-on-year in the fourth quarter of 2018, while figures on industrial value-added and retail sales beat economists' expectations - although data on fixed asset investment disappointed.

With more negative implications, perhaps, reports on Monday morning indicated that little progress was made in talks between Beijing and Washington at the start of the month on enforcing intellectual property laws in the Asian giant as well as regarding the forced transfer of technology from foreign companies to their Chinese rivals.

Despite that, Louis Kuijs at Oxford Economics believed there was a heightened probability that Washington would grant further "suspensions" on US tariff hikes.

On the euro area economic front meanwhile, Germany's Federal Office of Statistics reported a larger-than-expected slowdown in factory gate inflation for the month of December.

Producer prices reportedly fell by 0.4% month-on-month, dragging the annual rate of increase from 3.3% to 2.7% (consensus: 2.9%).

Still ahead for later in the session, Belgium's central bank was due to release the results of its consumer confidence for January at 1400 GMT.