Europe midday: Stocks off lows as oil steadies above $30 a barrel

European stocks came off earlier lows as oil prices recovered, edging back above the $30 a barrel mark.

At midday, the benchmark Stoxx Europe 600 index was down 0.5%, while Germany’s DAX and France’s CAC 40 were both 0.4% weaker.

Equity markets in Asia took a beating, with China’s Shanghai Composite ending down a whopping 6.4%, while Japan’s Nikkei slid 2.4% and Hong Kong’s Hang Seng fell 2.3% amid tumbling oil prices.

Oil prices steadied following heavy falls earlier in the day, with West Texas Intermediate up 0.2% at $30.41 and Brent crude 0.6% firmer at $30.69.

Saudi Arabia's decision not to cut investment exacerbated concerns about oversupply, but comments from Kuwait’s OPEC governor indicating the country may be ready to cut production provided some relief.

Markus Huber, senior analyst at Peregrine & Black, said sentiment remains negative overall, but it remains to be seen whether the latest selloff is the onset of another major leg lower or just profit-taking in light of last week's impressive gains.

“There is massive doubt that any ECB action will be able not only to boost growth but also fight disinflation with both a slowing economy in China and lower oil prices likely to lead inflation even lower," he said.

In corporate news, EasyJet shares were in the red after the budget airline said the Sharm el-Sheikh disaster and the Paris attacks hit its revenue for the three months to 31 December.

Dixons Carphone was flat after the electronics retailer lifted its annual profit guidance after a strong Christmas and announced plans to close 134 UK stores.

Siemens bucked the trend, racking up solid gains after the industrial group’s first quarter earnings late on Monday beat expectations and the company lifted full year profit guidance.

Royal Philips was also on the front foot after its fourth-quarter profit came in better than expected.

There are no major Eurozone releases due, so attention will turn to the US, where S&P/Case Shiller house prices are at 1400 GMT, Markit Services PMI is at 1445 GMT and consumer confidence is at 1500 GMT.

Meanwhile, investors will also be looking ahead to Wednesday’s Federal Open Market Committee rate decision.

“It is premature for the Fed to rule out another hike in March, so risk markets are unlikely to get a major relief,” said Societe Generale.

The bank’s economists expect a mixed message.

“The post-meeting statement is set to acknowledge the recent activity slowdown and tighter financial conditions, making it more dovish than the December communiqué. However, the FOMC’s outlook for the labour market and inflation is unlikely to change materially, and the statement is likely to characterise the risks as balanced.”