Europe midday: Shares slip into red as Russia pours cold water on summit talk

European shares slipped into the red at midday on Monday, as Russia said there was no concrete agreement for leaders' summit with the US to defuse the Ukraine border crisis.

The pan-European STOXX 600 was down 0.70% after a rising almost 0.50% in early trade after the French president, Emmanuel Macron said Vladimir Putin and Joe Biden had agreed to attend a summit aimed at de-escalating the crisis, although the US continued to warn that war is imminent and Moscow said there was no concrete arrangement for talks.

“Amid the uncertainty, some investors chose not to maintain positions over a weekend which is extended by today’s Presidents Day holiday,” said Interactive Investor head of markets Richard Hunter.

“In turn, this will lead to lighter volumes globally and this thinner liquidity is likely to exacerbate price movements given the high fragility of sentiment at the moment.”

“Concerns around the inflationary and tightening monetary environment have certainly not dissipated, but for the moment these concerns are secondary to the Russia and Ukraine tensions, with markets gyrating on the newsflow.”

On the economic front, Eurozone growth rebounded strongly in February, a key survey showed, but costs pressures continued to mount.

The flash IHS Markit Eurozone PMI Composite Index was 55.8 in February, compared to 52.3 a month earlier. The reading, a five-month high, was the largest monthly gain since March 2021.

The strong performance was attributed to the easing of pandemic restrictions, which boosted demand for travel, tourism and recreation, IHS Markit found.

In equity news, airline stocks were all higher on hopes that the Ukraine standoff could be ended, allowing a full resumption of travel. East European airline Wizz Air, British Airways owner IAG, Lufthansa and budget carrier Ryanair made gains.

Shares in French car parts group Faurecia rose as it forecast a rise in annual sales and expected semiconductor shortages to ease from the second half of 2022.

Worldline jumped 3.3% after the payments company entered exclusive talks to sell its TSS terminals business to US financial company Apollo Funds in a deal potentially worth around €2.3bn.

French vaccine maker Valneva gained 3.7% after saying its Scottish unit has received a grant of up to £20m to partly fund the research and development of manufacturing its Covid-19 vaccine VLA2001.