Europe midday: Stocks mixed as investors digest earnings, look to Fed

European stocks were mixed on Tuesday as oil prices recovered and investors sifted through a deluge of corporate news at the start of the Fed’s two-day policy meeting.

At midday, the benchmark Stoxx Europe 600 index was up 0.2%, Germany’s DAX was flat and France’s CAC 40 was 0.2% lower.

At the same time, oil prices were higher, underpinned by a weaker US dollar. West Texas Intermediate was up 0.8% at $42.98 a barrel and Brent crude was 0.9% firmer at $44.88.

Corporate news helped to underpin the tone somewhat as investors looked ahead to rate announcements from the Federal Reserve and Bank of Japan on Wednesday and Thursday, respectively.

“It's impossible to imagine the Federal Reserve will announce an interest rate hike at the end of its two-day get-together tomorrow, but what about June? Any hint from Fed chair Janet Yellen as to future central bank policy will move markets,” said Lee Wild, head of equity strategy at Interactive Investor.

“Conversely, in Japan, investors are demanding action to tackle a lifeless economy on Thursday, and widening the policy of negative interest rates is seen as a must. Fail to act and a sharp sell-off there looks inevitable.”

BP was a high riser after the oil giant’s underlying first-quarter earnings beat analysts’ expectations.

Safran was also in the black after the French aerospace supplier reported a 7.8% increase in first-quarter revenue.

Bayer edged up after the German drug maker said underlying core earnings rose nearly 16% in the first quarter, while French telecoms group Orange advanced after saying revenue grew 3.5% in the first quarter.

Nokia was higher after agreeing to buy digital health firm Withings for €150m.

Standard Chartered surged after its first-quarter update. Although it posted a 59% drop in profit amid depressed commodity prices, volatility in Chinese markets and weak emerging market sentiment, investors welcomed signs the bank was beginning to turn things around as loan impairments dropped.

British American Tobacco pushed up as it posted a jump in first-quarter revenue but cautioned that currency impacts could hit full-year profit.

On the downside, Air Liquide was weaker as it posted a drop in first-quarter sales but reaffirmed its profit target for the year, while Salzgitter fell after it reported a fall in first-quarter earnings and revenue.

FTSE 250 aerospace and defence group Cobham tanked after proposing a £500m rights issue in the second quarter of the year as it reported a slump in first-quarter trading profit.

On the data front, US durable goods orders are at 1330 BST, S&P/Case-Shiller house prices are at 1400 BST, the Markit Services PMI is at 1445 BST and consumer confidence is at 1500 BST.