Europe midday: Stocks mixed ahead of ECB rate announcement

European stocks were mixed by midday on Thursday as investors awaited the latest policy announcement from the European Central Bank, with another big rate hike on the cards.

The benchmark Stoxx 600 index was up 0.1%, while France’s CAC 40 was 0.4% higher, and Germany’s DAX was down 0.2%.

Russ Mould, investment director at AJ Bell, said: "For years, central bank interest rate decisions used to be background noise, with investors confident that rates would stay low. This year they’ve become must-watch events, with every word studied by the market.

"The current theme is not whether central banks will raise rates, but by how much. Investors are also hungry for forward guidance on future policy moves as central bankers try to regain the initiative in the fight against inflation, now that their narrative about the resurgence being transitory has proven - so far - to be wildly inaccurate.

"The European Central Bank is under the spotlight today and there is a feeling we could get a chunky rate hike, potentially as much as a percentage point increase. The ECB was late to the party when it announced a first interest rate increase for the year, and now it has some catching up to do."

In corporate news, London-listed Darktrace tumbled after tech investment firm Thoma Bravo said it will not be making an offer for the cybersecurity group. Darktrace said in a statement that the two parties had been unable to reach an agreement on the terms of an offer.

Primark owner Associated British Foods also suffered heavy losses as it warned that adjusted operating profit and earnings per share for the next financial year will be lower than this financial year.

Elsewhere, Philips fell following reports that French prosecutors have opened a preliminary investigation into a respiratory device recall by the medical device maker.