Europe midday: Stocks in the black as attention shifts to ECB's Draghi

European stocks edged higher on Thursday, recovering from heavy losses in the previous session as investors looked ahead to comments from European Central Bank chief Mario Draghi.

At midday, the benchmark Stoxx Europe 600 index was up 0.5%, Germany’s DAX was 0.7% firmer and France’s CAC 40 was up 0.6%.

Despite the positive tone, many market analysts remained sceptical.

“Any rallies in equity markets this year have been very short-lived and seized upon by investors as an opportunity to exit long positions or short the market,” said Craig Erlam, senior market analyst at Oanda.

“Given how gains today are dwarfed by Wednesday’s declines, I see little reason to believe this is going to be anything other than a dead cat bounce. The market looks very bearish right now and confidence has been shattered by the repeated large sell-offs.”

Meanwhile, SpreadCo analyst David Morrison said: “At the time of writing, all the major indices are in positive territory. On the face of it this is quite encouraging, particularly as crude is still trading near its 2003 lows. But once again, what looks like the beginning of a recovery in equities could easily turn out to be nothing more than a dead-cat bounce.”

Investors will be looking ahead to the European Central Bank’s rate announcement at 1245 GMT and the ensuing press conference at 1330 GMT.

No major policy changes are expected, so the main focus will be on what ECB chief Draghi has to say.

“The overall issue for Europe is still the ultra-low inflation number, and currently none of the measures put in place by the ECB have worked to drive this higher. What we will want to see from the press conference today will be some clarity on what is working and what isn’t and also what the recent moves in oil and China mean for monetary policy in the Eurozone,” said James Hughes, senior market analyst at GKFX.

In corporate news, education publisher Pearson surged to the top of the FTSE 100 despite warning over profits, as investors welcomed the company’s new restructuring programme.

Elsewhere, Deutsche Bank fell sharply after saying it expects to post a 2015 net loss of around €6.7bn on the back of writedowns and litigation charges.

Meanwhile, oil prices continued to decline ahead of data later in the session from the US Energy Information Administration. West Texas Intermediate was down 1.2% at $28.00 a barrel while Brent crude was 1% weaker at $27.60.

Still to come, US initial jobless claims and the Philadelphia Fed survey are at 1330 GMT while US consumer confidence is due at 1500 GMT.