Europe midday: Stocks fluctuate in choppy, holiday-thinned trade

European stocks fluctuated between gains and losses on Tuesday amid choppy, holiday-thinned trade, as oil prices regained some ground.

At midday, the benchmark Stoxx Europe 600 index was up 0.2%, Germany’s DAX was flat and France’s CAC 40 was up 0.1%.

Spain’s IBEX 35 fared a lot better than it had on Monday, trading 0.6% higher despite the backdrop of political uncertainty following the weekend’s inconclusive election.

“If yesterday acted as a warning sign, today appears to be providing confirmation that unpredictability, inconsistency and choppiness will likely dominate the festive period amid lower volumes,” said Joshua Mahony, market analyst at IG.

“With both the ECB and Fed having acted, we are seeing somewhat of a comedown within financial markets, where direction and conviction appear to be lacking.

“A general lack of economic announcements over the festive period means that any relatively lesser figures will likely be treated with a greater degree of importance. The US GDP figure this afternoon will thus provide markets with a central focus despite the fact that this represents merely a revision, rather than the more keenly watched advance reading,” he added.

Investors took some comfort from that signs that China’s leaders will take additional steps to support growth, including widening the fiscal deficit and propping up the housing market.

Statements released at the end of the government’s Central Economic Work Conference by the official Xinhua News Agency revealed that leaders believe monetary policy needs to be more flexible and fiscal policy more forceful to create the monetary conditions needed for structural reforms.

The recovery in oil also provided some relief, with West Texas Intermediate up 0.7% to $36.05 a barrel and Brent crude 0.2% firmer at $36.43 after falling to 11-year lows in the previous session.

BG Group and BP rallied, while the Stoxx 600 oil and gas index rose 1.2%.

Shares in Dutch staffing group USG People rocketed after Japanese employment agency Recruit agreed to buy the company for €1.4bn.

On the downside, Marks & Spencer was weaker after Nomura cut its price target on the stock, while ITV slipped after a spokesman for Comcast told Variety magazine that speculation it was looking to bid for the London-listed broadcaster was “completely inaccurate.”

In economic news, a survey by market research firm GfK showed consumer confidence in Germany is on the rise following four months of decline.

Its consumer confidence index for January increased to 9.4 from 9.3 the previous month, beating expectations of an unchanged reading.

Confidence in the economy was up 8.2 points to 2.9 in December, moving back into positive territory and ending a six-month drop.

“The terrorist attacks in Paris in mid-November and the resulting increased terror threat in Germany do not seem to be impacting German consumers,” GfK said.

“Thus, the good conditions domestically seem to be reassuming more importance.”

Still to come, investors will look to the third release of third quarter US GDP at 1330 GMT and existing home sales at 1500 GMT.