Europe midday: Stocks mixed after 'dovish' ECB

Stocks are mixed after the European Central Bank shifted its balance of risks to the downside, cautioning that there was a long list of potential risk factors to mind.

Nevertheless, after a brief dip the single currency bounced back, as ECB chief Mario Draghi sounded a more confident note as regards the medium-term outlook.

Commenting on the ECB's decision, Claus Vistesen at Pantheon Macroeconomics said: "In total, we are still just about willing to believe that the economic data will improve enough to allow/prompt the ECB to raise the deposit rate once this year.

"But today’s message also was crystal clear; more of the same and it won’t happen, though the only consequence of that will be that we, and other economists, will have to crawl back in our hole and admit that markets were right all along. In other words; no rate hikes in 2019 is a difficult story to trade, at least in fixed income markets."

As of 1430 GMT, the benchmark Stoxx 600 was dipping by 0.16% or 0.57 points to 354.54, alongside an advance of 0.07% or 8.66 points to 11,082.76 for the German Dax and a gain of 0.13% or 27.88 points to 19,426.74 on the FTSE Mibtel.

In parallel, euro/dollar was little changed, drifting lower by just 0.05% to 1.3769, having recovered from earlier weakness, as traders 'sold the rumour and bought the fact' of the ECB's now more 'dovish' policy stance.

Front month Brent crude oil futures meanwhile were down by 0.295% at $60.93 a barrel on the ICE.

Underlining the soft economic outlook, especially in the near-term, IHS Markit's closely-followed gauge of euro area manufacturing and services sector activity revealed that growth stopped almost completely at the start of 2019, with France's economy threatening to drop into contraction, alongside a downturn in German manufacturing.

The survey compiler's preliminary Eurozone Purchasing Managers' Index composite output gauge declined from a reading of 51.1 for December to 50.7 in January, hitting a 66-month low in the process.

Economists had in fact expected an improvement in the composite index to 51.4.

Elsewhere, Norway's central bank opted to stay put on interest rates, keeping its official short-term rate at 0.75%.