Europe midday: Stocks near best levels of the day, as traders see 'glass half full'

Europe's main stockmarket indices are near their best levels of the day, tracking fresh gains on Wall Street and helped by the release of slightly better-than-expected economic data on the Continent.

Nonetheless, analysts and economists were for the most part quite downbeat when it came to the latter, although some analysts appeared to be of the opinion that 'bad news is good news', in so far as it might result in more dovish central banks.

On that note, IG's Chris Beauchamp told clients: "Alphabet's numbers put something of a dampener on the mood yesterday, but there has been little to stop this equity rally over the past month, and in the grand scheme of things, Alphabet's forecasts of higher spending are easily outweighed by the better US economic data and a dovish Fed.

"Speaking of central banks, today's UK services PMI should prompt the BoE to be a touch more cautious on the UK economy, while the dire German figures might also cause disquiet at the ECB. But the slowdown seems global, which will have investors hoping that the Fed won’t be alone in its turn towards dovishness."

Investors were also looking past a spate of poor corporate update from several top names in the European semiconductor space.

As of 1430 GMT, the benchmark Stoxx 600 was up by 0.97% or 3.51 points to 363.45, alongside an advance of 1.24% or 139.33 points to 11,316.87 for the German Dax and an advance of 1.31% or 65.31 points to 5,065.50 for the French Cac-40.

The FTSE Mibtel meanwhile was ahead by 0.91% or 180.23 points to 19,785.55.

From a sector standpoint, the Stoxx 600's Oil&Gas sector gauge was 1.34% higher to 328.57, while the Technology sector index was up by 0.84% to 425.20.

To take note of, in the background, US tech giant Alphabet had managed to pare overnight losses of almost 3% to trade just 0.33% lower.

Euro/dollar meanwhile was drifting down by 0.09% to 1.4244.

In the corporate space, Infineon cut its budget for capital outlays in 2019 from a range of €1.6bn to €1.7bn to approximately €1.5bn.

But after a dip at the opening bell, the German semiconductor manufacturer's stock price had moved back into the green and was climbing by almost 1%.

Shares of Austrian chipmaker AMS on the other hand were down by 13% after guiding towards first quarter sales of between $350m to $390m, which was comfortably below analysts' estimates.

The company, which makes sensors for the likes of Apple, cited less favourable end markets, subdued demand for smartphones and the sluggishness typically associated with every first quarter.

It also put on hold plans for a secondary listing in Hong Kong and suspended its cash dividend.

On the economic front, IHS Markit's euro area services sector Purchasing Managers' Index for December was revised higher from a preliminary print of 50.8 to 51.2 (consensus: 50.8) and its so-called composite PMI, for both the factory and services sectors, from 50.7 to 51.0 (consensus: 50.7).

The main factor behind the mark-up was the revision carried out to the French PMI, from 47.5 to 47.8.

Commenting on the data, Chris Williamson, IHS Markit's chief business economist, said: "The deteriorating picture looks broad-based. Italy is in its steepest downturn for over five years and France has sunk into its sharpest decline for over four years. Faster growth in Germany and Spain meanwhile looks tenuous, as order book trends deteriorated in both cases."

Similarly, Pantheon Macroeconomics's chief Eurozone economist, Claus Vistesen, told clients: "Overall, growth in new business and production has slowed sharply in the Eurozone as a whole.

"Indeed, in manufacturing firms are now having to eat into work backlogs to sustain production amid falling new orders. Employment growth remained positive, but it is now slowing, and falling outright in Italy, sending a clear signal that the slowdown is now beginning to eat into firms' demand for labour."

In parallel, Eurostat reported a 1.6% month-on-month drop in euro area retail sales volumes for December; however, Vistesen pointed out how in quarterly rates of change retail sales were 0.6% higher over the final three months of 2018 versus flat sales in the third quarter.