Europe midday: Monday blues lifts as stocks bounce back

European stocks bounced back from early Monday blues by midday after the region’s unemployment rate shrank to its lowest since 2011, though the war of words about Greek debt broke back into the headlines.

The euro-sterling rate rose above the 0.80 mark for the first time since December 2014, while trade-weighted sterling fell to 84.1, its lowest since December 2013.

European Central Bank executive board member Peter Praet also came out to say that the ECB will act "forcefully" if required to counter low inflation levels.

At just past noon, the benchmark DJ Stoxx 600 was 0.79% higher at 335.77, with Germany's Dax-30 rising 0.98% to 9,890.80, France's Cac 40 up 1.01% to 4,365.89, Italy's Mib up 0.45% to 17,862.32 and Spain's Ibex 0.96% higher at 8,685.30.

February's euro-area unemployment rate improved to 10.3% from January's 10.4%, while for the European Union it remained 8.9%.

This helped buoy investors after a meagre rise in Sentix investor confidence number, a widening decline in PPI and a new Greek debt row.

Greece was back in the news after an alleged leak about International Monetary Fund tactics to up the ante on Greece to bring about a new bailout deal.

IMF managing director Christine Lagarde said on Sunday that her staff would not push Greece closer to default as a negotiating tactic, though the Greek Prime Minister's office said on Monday that a bailout review should be concluded immediately "without unrealistic demands for additional measures beyond those set out in the July bailout agreement".

German financial ministry spokesman Martin Jaeger said the review was expected to be completed by late April and a Greek debt 'haircut' was not up for debate.

Analyst Brenda Kelly at London Capital Group said Greece was considered only a light event risk against the backdrop of the falling Eurozone unemployment levels.

The trading week had kicked off on a weak note as telecoms stocks were walloped after a failed merger attempt between between Bouygues and Orange. Shares in Bouygues were 16.38% lower to €29.39 and those in Orange by another 5.16% to €14.60.

Oil prices were in the red but off their lows, though weakness in the Japanese yen was another potential risk factor.

"In the absence of any major catalysts in the markets at the start of the week, it seems equities are continuing to be lifted by the prospect that US interest rates will remain lower for longer," said analyst Craig Erlam at Oanda.

"The Fed’s new dovish stance has provided some reassurance to investors that were concerned that a faster pace of tightening could choke off any recovery in the US, particularly at a time when conditions are already tightening as a result of the increasingly stimulative policy of other central banks. The release of the FOMC minutes from the March meeting on Wednesday should offer more insight into how fast the pace of tightening will be, with the Fed having already indicated at the last meeting that it now only expects two hikes this year rather than the four it alluded to in December."