Europe midday: Stocks bound ahead on upbeat economic surveys, Dax leads

Stocks across Europe were bounding higher on Tuesday, led by the exporter-heavy German Dax, on the back of better-than-expected out of the euro area and from overseas.

That was despite a bout of volatility overnight after White House trade adviser, Peter Navarro, was quoted as saying the US-china trade deal was "over", only to quickly afterwards claim he had been "wildly misquoted", with Navarro explaining he was referring to Washington's trust in the Chinese government in the wake of the pandemic.

In any case, some traders were carefully watching frictions between Beijing and the US, European Union and India - not least on international trade - for any sign that some of the worst case scenarios might materialise.

Against that backdrop, as of 1315 BST the benchmark Stoxx 600 was up by 1.49% at 368.13, alongside a 2.7% advance for Germany's Dax to 12,590.50 while the FTSE Mibtel was adding 1.77% to 19,824.14.

The best performing areas on the Stoxx 600 were Automobiles&Parts (3.53%) while lenders' shares were climbing 3.53%.

Front month Brent crude oil futures were also advancing, trading up by 1.72% to $43.82 a barrel on ICE, while euro/dollar was up 0.41% to 1.1307.

In economic news, the key euro area manufacturing and services sector Purchasing Managers' Indices from IHS Markit both leapt past economists' forecasts.

The former rose from 30.5 for April to 47.3 in May (consensus: 40.5) and the latter from 31.9 to 48.2 (consensus: 41.0).

France's composite PMI, which aggregates results from both surveys fared best, leaping from 32.1 to 51.3 thanks to a rebound in manufacturing as the Covid-19 lockup in the country was eased.

IHS Markit conceded that the economic downturn would end heading into the summer, yet the "timing of a return to normal still something that can only be speculated upon."

"Virus-related restrictions likely to continue to hit many businesses for the rest of the year, we remain very cautious of the strength and sustainability of any economic rebound."

Meanwhile, the World Trade Organisation forecast that global trade might only shrink by 13% in 2020, versus an April projection for a drop of 13-32%, although that would still be a tad worse than the 12.5% crash seen during the 2008 financial crisis.