Europe midday: Shares advance as investors continue to search for yield

European stocks were continuing their move higher, tracking the fresh record highs notched up overnight by the main Wall Street gauges as investors continued to search for yield against a backdrop of improving macro data, according to strategists.

As of noon, the benchmark Stoxx 600 was up by 0.76% to 394.65, alongside a gain of 1.10% to 12,875.43 for the German Dax and an advance of 1.02% to 5,372.77 in the Cac-40.

European equity funds saw a 10th consecutive week of inflows, strategists at Bank of America-Merrill Lynch pointed out, referencing data from EPFR. That was the longest such stretch since December 2015.

"Investment grade and government bond funds have been the main beneficiaries over the past years amid QE. However, amid an improving macro, the reach for yield trade via HY credit, equities and EM debt is reviving," they said.

Banks were doing especially well on the last day of the week, in anticipation of solid US jobs numbers.

In parallel, euro/dollar was exactly flat at 1.1216.

The Stoxx 600's gauge of lenders' shares was gaining 1.58% to 183.49, albeit still well below its year-to-date highs at 190.0, while an equivalent gauge for Oil&Gas stocks was 0.69% lower to 304.81.

Going the other way, front month Brent crude oil futures were down by 2.37% to $49.46 a barrel on the ICE. According to technical analysts at Web Financial Group, the 'make-or-break' level to watch in the very short-term lay at $46.64.

"Equity markets are positive this morning, however falling Crude Oil prices are hampering optimism after a strong lead from Asian and US markets," said Henry Croft, research analyst at Accendo Markets.

To take note of, some market chatter was also referencing signs that the funding crunch in China was abating.

Factory gate prices in the Eurozone undershot market forecasts for a rise of 0.3% month-on-month in April and an annual rate of advance of 4.5%.

Instead, they were unchanged versus the prior month and 4.3% ahead in comparison to the year-ago period.

Still on the calendar for Friday, US non-farm payrolls data for the month of May are scheduled for release at 13:30 BST.

Shares in BMW were edging higher despite the German carmaker having reported an 11% drop in US car sales in May.

Linde was also on the frontfoot after its board and that of Praxair voted the day before to merge.