Europe midday: Eyes on US debt; Polymetal tanks on US sanctions

European shares hovered in positive territory at midday on Monday as investors awaited the outcome of talks on the US debt ceiling, while shares in gold producer Polymetal tanked as the US hit its Russian operations with sanctions.

The pan-regional Stoxx 600 index was up 0.09%, with major continental bourses mixed. With little corporate and economic news about, there was little to drive investor sentiment.

"It is a mixed start to trade across Europe with the FTSE 100 extending Friday’s gains, outperforming to log a slim gain. China-linked stocks like Burberry and Standard Chartered are at the top of the large-cap index following positive price action overnight from the Shanghai Composite and the Hang Seng," said Victoria Scholar, head of investment at Interactive Investor.

"As the US debt ceiling deadline draws closer, President Biden and House Republican speaker Kevin McCarthy are expected to hold further talks today following a phone call on Sunday as investors pray that a US default will be averted.

"Meanwhile US-Sino trade tensions are escalating after Beijing banned Micron Technologies from selling semiconductors to key industries in China, a move strongly opposed by Washington. Shares in Micron are trading lower by more than 5% in Frankfurt while the Hang Seng Technology index rallied sharply.

In equity news, London-listed Polymetal shares tanked as the company mounted a firefighting exercise, stressing that new US restrictions did not affect its business outside Russia.

The US State Department on Friday included Polymetal's Russian business and Polyus - the largest gold producers in Russia - on its latest list of sanctions targets, aiming to punish Moscow for its invasion of Ukraine.

Dechra shares slumped as the pharmaceutical company issued a profit warning.

Ryanair made gains after the budget airline recovered to a near-record annual profit following a "strong" post-Covid recovery. BA and Iberia owner IAG and Wizz Air also rose.

Reporting by Frank Prenesti for Sharecast.com