Europe midday: Stocks edge higher despite investor caution

Stocks across the Continent are trading slightly higher despite the ongoing budget battle between Brussels and Rome, even as traders continue to monitor the ongoing trade war between the US and China.

The day before, the European Commission sent a letter to the Quirinale telling Italian officials that the country had made too little progress in reducing its public deficit, resulting in a shortfall worth €11bn or 0.7% of the country's gross domestic product.

While analysts did not believe that the European Union would go as far as levying a fine on Rome, its economics minister, Giovanni Tria, was expected to respond on Thursday.

According to daily Il Mesaggero, Tria will blame low inflation and the ongoing global trade tensions for the deficit.

In parallel, Italy's Five Star movement had called an internal vote on Thursday on whether to keep Luigi di Maio as head of the party.

As of 1252 BST, the benchmark Stoxx 600 was higher by 0.36% at 371.83, alongside a gain of 0.34% to 11,877.89 for the German Dax while the Cac-40 was adding 0.34% to 5,239.40.

Acting as a backdrop, according to Bloomberg, which cited people familiar with the matter, Beijing had put purchases of US soybeans on hold.

As well, speaking overnight China's vice foreign minister, Zhang Hanhui, reportedly said that Beijing was against the use of "big sticks" like sanctions, tariffs or protectionism, labelling recent US actions as "naked economic terrorism".

The economic calendar was light on Thursday, but what data there was came in on the weak side of things.

Mimicking a larger than expected slowdown in French inflation revealed the day before, Spain's national statistics office reported that the year-on-year rate of increase in the country's harmonised CPI slipped from 1.6% to 0.9%, missing forecasts for a decrease to 1.2%.

Shares in Axel Springer, owner of German daily Bild, were a standout gainer, rocketing by as much as 23%, after US private equity outfit KKR said it could buy out minority shareholders with a view to taking the group private.