Europe midday: Bounce in stocks gathers strength, tech recovers from early selling

A bounce in European stocks is gathering strength, after White House economic adviser, Larry Kudlow, denied media reports that a trade planning meeting between Chinese and US officials scheduled for the day before had been cancelled.

There was also some positive 'market chatter' to be heard around the possibility that the US Congress might be making headway in putting paid to the ongoing partial federal government shutdown in the States.

Also helping to boost sentiment, the euro was on the back foot against Sterling, slipping by 0.5% to 0.87208, after the shadow chancellor, John McDonnell , told the BBC overnight that his party might support a cross party amendment to extend Article 50 if the government was unable to garner sufficient support for its plans.

Commenting on the garbled headlines around trade, Michael Hewson at CMC Markets UK said: "These conflicting reports still served to keep US markets under pressure given they had already been trending lower after playing catch-up, or catch down with markets in Europe, having missed out on the move lower due to being closed for Martin Luther King Day.

"As a result markets here in Europe are expected to open lower this morning as expectations about a quick détente on trade become slightly more realistic."

Against that backdrop, as of 1259 GMT the benchmark Stoxx 600 was up by 0.37% or 1.32 points to 356.41, alongside a rise of 0.42% or 20.54 points to 4,868.13 for the Cac-40, while the German Dax had turned around to trade higher by 0.25% or 28.91 points at 11,119.38.

Also helping to boost sentiment was a 6% bounce in shares of IBM in 'after-hours' trading in New York after the US technology giant beat analysts' estimates for its fourth quarter earnings and revenues.

Dutch chip equipment maker, ASML Holdings, reversed an early retreat despite warning that first quarter sales might come in far below consensus projections.

Reflecting those moves, the Stoxx 600 technology sector sub-index had also erased its losses and was trading 0.36% higher to 412.11.

On the European economic front meanwhile, INSEE's French business climate indicator was unchanged in January from the month before at 103.0.

For later in the day, investors were waiting on the release of the European Commission's 'flash' euro area consumer confidence index for January.