Europe midday: Banks, Basic Resources pace gains after PMI data

Positive news on factory sector activity in the euro area and from further afield buoyed stocks amid light trading conditions ahead of the 4 July holiday in the States, which meant many traders were away from their desks.

As of 1215 BST the benchmark Stoxx 600 was up by 0.61% or 2.30 points at 381.67, alongside a gain of 0.66% or 80.97 points for Germany's Dax taking it to 12,406.51 and 1.01% rise in the Cac-40 to 5,172.16.

Banks were among the best performers, with the Stoxx 600 sector gauge up by 1.61% to 185.26.

Shares in Basic Resources firms were also trading on the front front, with the subindex tracking rising 1.96% to 394.92 thanks to upbeat manufacturing data out of China overnight.

The single currency was down by 0.46% to 1.1371 alongside.

A stronger tone in oil markets was also providing a favourable tailwind for stocks, although by midday futures had largely erased their earlier advance.

Front month Brent crude oil futures were up by 0.12% to $48.83 a barrel on the ICE, rising for an eighth consecutive day. Data released by Baker Hughes on 30 June revealed the first drop in 24 weeks in the US oil rig count.

The numer of rigs operating in the States declined by two to 756.

"A shortened trading day in the US on Monday may weigh heavily on trading activity but we will get some data early in the session, while there’s been no shortage of drivers elsewhere earlier in the day," said Craig Erlam, senior market analyst at Oanda.

Erlam also reminded clients that trading volumes were likely to be subdued on account of the 4 July holiday the next day in the States and the shortened session in New York on Monday ahead of that.

Investors were also keeping tabs on the presentation by Germany's ruling CDU party of its election manifesto.

Some media reports indicated it would include tax cuts worth€15.0bn and increased public investment of €12.0bn.

French president Emanuelle Macron was also expected to hold a joint session of parliament, a fairly rare event, to set the tone for his five-year tenure.

Acting as a backdrop, overnight Caixin's China manufacturing sector purchasing managers index printed at 50.4, versus a reading of 49.6 for May (consensus: 49.8).

Eurozone factory activity hit a 74-month high in June, revised survey data from Markit revealed.

Its purchasing managers index for Eurozone manufacturing rose from a reading of 57.0 for May to 57.4 in June (preliminary: 57.3).

Euro area unemployment held at 9.3% in May - its lowest level since march 2009 - which was in-line with forecasts.

Danone was higher after the company said it sold Stonyfield, one of its US dairy subsidiaries, for $875m or 20 times the company's EBITDA.