Europe midday: Stocks extend early gains

Stocks were holding higher on the last session of the month, more than recouping the previous day's losses, despite the release of two worse-than-expected economic data points.

In the background, investors were waiting on euro area consumer price data for August due out the next day and the monthly US jobs report on the following Friday, analysts said.

As of 1146 BST, the German Dax was gaining 1.77% to 13,121.16, the FTSE Mib was ahead by 1.56% to 22,183.75 and the Cac-40 was up by 1.07% to 6,289.07.

Euro/dollar was up by 0.33% to 1.0030 amid month-end position adjustments, said analysts at Unicredit.

Worth noting, rate-setters at the European Central Bank were due to meet on 8 September amid expectations for a further 50 basis point interest rate hike.

Market participants were also keeping tabs on the news-flow out of Ukraine following the launch of a Ukrainian counter-offensive in the country's south.

On the economic side of things, the European Commission reported a decline in its Economic Sentiment Index for August to 97.6, which was down from a reading of 98.8 for July (consensus: 98.6).

The sub-index for industrial sentiment in the single-currency bloc slipped to 1.2 (consensus: 1.8) from 3.4 in July.

According to Claus Vistesen, chief euro area economist at Pantheon Macroeconomics, the ESI squared with his forecast for a 0.3% quarter-on-quarter contraction in gross domestic product growth over the three months to June.

In parallel, year-on-year headline consumer price readings covering the month of August published earlier for North Rhine-Westphalia, Brandenburg, Bavaria and Saxony all printed higher, pointing to a possible upside surprise in the national data that were due out at 1300 BST.