Europe midday: Stocks little changed as focus shifts towards ECB decision, EU summit

European stocks were holding slightly higher on Thursday as investors eyed the latest twist in Brexit trade deal negotiations and a European Central Bank meeting later in the day.

The Stoxx Europe 600 was up 0.08% to 395.2, alongside a 0.1% to 13,353.0 for Germany's Dax while the FTSE Mibtel was climbing 0.35% to 22,046.48.

Overnight, the UK Prime Minister and the head of the European Commission met for dinner and agreed to extend talks until Sunday, but for some observers the odds of clinching even a skinny Brexit deal were in fact falling.

CMC Markets analyst Michael Hewson said the main obstacle to a deal was agreement on an arbitration process to deal with disputes on regulatory divergence.

“Yesterday German Chancellor Angela Merkel set out the EU’s red lines, saying that Brussels would accept a no deal outcome if the two sides could not figure out a way to overcome this key obstacle,” he said.

Investors were also watching the European Central Bank meeting to see if more stimulus would be provided to deal with the second wave of coronavirus lockdowns.

Analysts are expecting a €500bn increase to the ECB’s Pandemic Emergency Purchase Programme.

And European Union heads of state were scheduled to start a two-day summit at which the bloc was expected to give the green light to its €1.1trn seven-year budget and €750bn of Covid-19 aid funds.

In equity news shares in online food delivery group Ocado fell 6% after the company raise core earnings guidance, while home meal-kit supplier HelloFresh was the top gainer, with the shares up 4%.

Industrial and electronics products group Electrocomponents saw its shares rise after unveiling two acquisitions worth £150m and a £180m share placing.

Automotive retailer Inchcape said full-year profits would be “materially ahead” of expectations and was considering reinstating its dividend after a better-than-expected performance in November.

The company on Thursday said it expected pre-tax profit, excluding exceptionals, would be materially ahead of market consensus of £108m as the impact of the second UK Covid-19 lockdown was not as bad as first feared.