Europe midday: Stocks kick the month off on a positive note

European stocks kicked off the month of September on a positive note, with miners providing support as investors digested some mixed Chinese data.

At midday, the benchmark Stoxx Europe 600 index was up 0.9%, Germany’s DAX was 0.6% higher and France’s CAC 40 was up 1.1%. In terms of sectors, the Stoxx 600 basic resources index was up 1.2% as metal prices recovered.

At the same time, oil prices were little changed, having rebounded from the previous session’s losses earlier as the dollar weakened. West Texas Intermediate was down 0.1% at $44.67 a barrel and Brent crude was down 0.2% at $46.78.

“September, officially one of the worst months for stock markets, begins with a bang this year,” said Lee Wild, heady of equity strategy at Interactive Investor.

“Friday's US jobs report is the first piece of major data, and its significance cannot be understated. A higher number will likely trigger an increase in US interest rates in three weeks' time, the first since December, putting equity markets under pressure. Stocks have already struggled this week as traders take money off the table, just in case there’s a nasty surprise. And that’s probably wise given the unpredictable nature of August payrolls. Talk is that 200,000 or more makes higher rates this month a dead cert.”

An official survey in China showed factory activity in the world’s second-largest economy grew at its fastest rate in nearly two years last month.

The official purchasing managers’ index rose to 50.4 in August from 49.9 in July, marking its best level since October 2014. It was also ahead of economists’ expectations for an unchanged reading.

However, the Markit/Caixin PMI fell to 50 in August from 50.6 in July, missing expectations for a reading of 50.1.

Finally, the official services PMI declined to 53.5 from 53.9 the month before.

Back in Europe, Markit’s final eurozone manufacturing purchasing managers’ index came in at 51.7 in August, marking a three-month low.

This was down from the flash estimate of 51.8 and July’s reading of 52.0.

Still, the PMI has now signalled growth for 38 consecutive months, marking a continuation of its survey-record unbroken sequence above the 50.0 stagnation mark.

Chris Williamson, chief business economist at IHS Markit said: “Eurozone manufacturers reported a wavering performance in August, with signs that growth could slow further in coming months. The rate of expansion dipped to a three-month low but is at least holding up in the face of the uncertainty caused by the UK’s vote to leave the EU. The survey indicates that factory production is growing at a steady though unexciting annual rate of just under 2%.

“There is some suggestion of a Brexit impact, however, and growth may wane further in September after new orders growth slipped to a one-and-a-half year low.”

In corporate news, distiller Pernod Ricard racked up healthy gains as it posted a rise in full-year profit but said sales of its two largest brands dropped.

Roche was higher after the Swiss drug maker said its cancer immunotherapy Tecentriq extends survival in lung cancer.

Radiation therapy equipment maker Elekta rallied as its first-quarter core profit beat analysts’ expectations.

FTSE 250 recruiter Hays was in the red despite reporting a rise in profit for the year to the end of June as net fee income grew. The company said it was too early to gauge how Brexit will affect the business.

In the US, initial jobless claims are at 1330 BST, while construction spending and ISM manufacturing are at 1500 BST.