Europe midday: Shares up as DS Smith surges on Mondi approach

European markets clung on to gains on Thursday, amid another dump of corporate earnings with shipping giant Maersk slumping after it suspended share buybacks in response to the impact of attacks on vessels in the Red Sea and paper and packaging firm DS Smith surging after an approach from rival Mondi.

The pan-European Stoxx 600 was 0.05% higher at 485.88, with all major regional bourses higher. Investors will also be eyeing US jobless claims data later in the day.

In economic news, China's deflationary woes continued as the decline in consumer prices accelerated at its fastest pace in 15 years in January, with weak demand continuing dragging on efforts to bolster the struggling economy.

The consumer price index fell 0.8% year-on-year in January, faster than the 0.5% expected. It marked the fourth straight month of declines and the biggest contraction since the 2008 financial crisis.

“In plain English, it means that the Chinese efforts to boost growth and bring inflation back are not working according to the plan,” said Swissquote analyst Ipek Ozkardeskaya.

“Money poured into the Chinese system doesn’t circulate in a way to stimulate economy – blame people who lost confidence – and the radical measures that the government has put in place to prop up equity valuations hardly help China’s battered stock markets to get back on their feet.”

In equities, Adyen surged to the top of the Stoxx with a 22% rise as earnings beat expectations, helped by higher sales and stricter cost control.

Packaging company DS Smith surged after confirming it has received "a highly preliminary expression of interest" from rival Mondi.

Maersk slumped more than 12% after the Danish firm suspended share buybacks and flagged “high uncertainty” in its 2024 earnings outlook. Militant Houthi militias have been attacking shipping in the Red Sea, forcing vessels to take longer, safer routes.

Societe Generale shares fell after the French bank posted a sharp fall in fourth-quarter net profit on the back of weaker net income.

Unilever rallied after the consumer goods giant announced a €1.5bn share buyback as it reported a return to volume growth in the final quarter of 2023 and said it expected a "modest improvement" in operating margin this year as prices eased.

Reporting by Frank Prenesti for Sharecast.com