Europe midday: Stocks nudge higher as oil pops up again

European stocks nudged higher on Friday, struggling for direction following recent gains at the end of a week jam-packed with policy decisions.

At midday, the benchmark Stoxx Europe 600 index and France’s CAC 40 were up 0.3%, while Germany’s was 0.2% higher.

Meanwhile, oil prices popped higher again, on track for solid weekly gains. West Texas Intermediate was up 1.6% to $40.86 a barrel and Brent crude was 1.6% higher at $42.19.

Mike van Dulken, head of research at Accendo Markets, said this week’s central bank meeting have resulted “in gloomy views aplenty fuelling optimism of lower - even negative - rates for longer”.

This week saw the Bank of Japan downgrade its assessment of the country's economy, while the Federal Reserve scaled back its prediction to two rates hikes this year from four in December and the Bank of England cautioned that the EU referendum might affect inflation.

European stocks were dented on Thursday by strength in the euro which weighed on exporters as the greenback slid in the wake of the Fed’s dovish outlook on rates the previous day. However, a recovery in the dollar on Friday lent a helping hand to exporters.

Investors digested comments from the European Central Bank’s chief economist, who said in an interview published on Friday that the bank could cut interest rates again if the Eurozone economy does not pick up.

Peter Praet told Italian newspaper La Repubblica that rates had not reached their lower limit yet.

"As other central banks have demonstrated, we have not reached the physical lower boundary," he said.

In corporate news, housebuilder Berkeley Group was in the red. Although the company said it expects full year results to be at the top end of expectations, it also said it saw a 4% drop in forward reservations in the three months to the end of February and questioned the government’s response to the housing crisis.

Shares in Italian insurer Generali slipped after its fourth quarter net profit missed analysts’ expectations.

On the upside, Telecom Italia pushed higher despite saying it swung to a net loss in 2015.

Data released by Destatis earlier showed German producer prices fell more than expected in February.

Producer prices dropped 0.5% from January, which was steeper than the 0.2% decline pencilled by economists, as energy prices slid 9.4% on the month.

On the year, producer prices were down 3%, missing expectations for a 2.6% drop.

Dennis de Jong, managing director at UFX.com, said: “With the price of goods continuing to decline, German finance minister Wolfgang Schäuble will be concerned about what implications this will have on inflation within his European powerhouse.

“As Europe’s largest and strongest economy, Germany carries the can for much of the Eurozone, so this less-than-impressive data could have a knock-on effect that will send reverberations across the continent."

Still to come on the macroeconomic front, University of Michigan consumer sentiment is at 1400 GMT.