Europe midday: Shares up but Sweco slumps on earnings miss

European markets held moderate gains on Friday while German inflation registered a welcome fall for the Continent's largest economy.

The pan-European Stoxx 600 was up 0.7% higher at 485.63 after a strong session on Wall Street, with the S&P 500 passing the 5,000 milestone for the first time during intraday trading.

German inflation fell to 2.9% January in line with preliminary data, down from 3.7% in December, and driven by a sharp fall in energy costs, according to official data released on Friday. The country's DAX stock market index was up 0.06% on the news at 16,981 points.

There was a sharp drop in energy inflation to -2.8% from 4.1% in December, despite the discontinuation of the brake on energy prices and the introduction of a higher carbon price, which affects the price of fossil fuels such as motor fuels, heating oil and natural gas.

"In the markets, it’s been a flat old week in Europe with little in the way of direction or movement for the major indices, despite a bunch of corporate earnings ... macro is maybe still in charge here and the bond markets haven’t done much either. The CAC in Paris has risen almost 1% this week but the DAX and FTSE are within a quarter of a percent of where they started," said Finalto chief market analyst Neil Wilson.

In equity news, shares in Sweco plunged 13% to the bottom of the Stoxx after the Swedish engineering and architecture consultancy company missed fourth-quarter earnings expectations.

Shares in Ubisoft rose 18% in early deals as the French video game company pointed to a “turnaround” in its output in its latest earnings report.

L’Oreal shares were down after reporting lower-than-expected fourth-quarter sales Thursday in a sign of continued pressure on the luxury market.

Luxury goods maker Hermes gained as results pleased investors.

Reporting by Frank Prenesti for Sharecast.com