Europe midday: Stocks little changed after IFO takes axe to GDP forecasts

Stocks on the Continent are little changed, failing to participate in the gains seen overseas after one of the most prestigious research institutes on the Continent took an axe to its forecasts for German economic growth for this year and next.

According to Germany's IFO, the euro area's largest economy will only expand by 1.5% in 2018, followed by growth of 1.1% in 2019, as softer global growth prospects drag on its export performance, especially that of its carmakers.

That was down from its prior forecasts for GDP growth of 1.9% for each of those years.

The downbeat prognosis was echoed by the country's ministry of economics, which in its latest monthly economic report said that trade conflicts, turmoil in emerging market currencies, and the risk of a hard Brexit were all weighing on global growth prospects and business confidence.

As of 1458 GMT, the benchmark Stoxx 600 was flat at 349.96, alongside a dip of 0.15% or 7.44 points for the French Cac-40, while the FTSE Mibtel was adding 0.64% or 127.75 points to 19,073.37.

In parallel, the yield on the benchmark 10-year Italian government note was extending its recent retreat, falling by six basis points to 2.94%, although it was off its intra-session lows of 2.88%.

Acting as a backdrop, as expected the European Central Bank kept all its key interest rates unchanged on Thursday, even as it announced that it would be wrapping-up its bond buying programme at the end of the year and sounded a slightly more 'dovish' note on the economic outlook.

Nonetheless, the risks to the outlook continued to be broadly balanced and ECB staff marked down their GDP growth forecasts for the Eurozone in 2018 and 2019 by just one tenth of a percentage point, to 1.9% and 1.7%, respectively.