Europe midday: Stocks off lows in holiday-thinned trade; oil prices slide again

European stocks were off earlier lows but still in the red in holiday-thinned trade, as oil prices resumed their slide on the last full trading day of the year.

At midday, the benchmark Stoxx Europe 600 index was down 0.2%, France’s CAC 40 was flat and Germany’s DAX was off 0.6%.

Meanwhile, the recovery in oil prices proved fleeting as they were under pressure again on Wednesday.

West Texas Intermediate was down 2.5% at $36.93 and Brent crude was 1.8% lower at $37.11, as worries about slowing demand and high supply weighed.

Late on Tuesday, a report from the American Petroleum Institute showed an increase of nearly 3m barrels in crude supplies in the week ended 25 December.

Forecasts that a cold snap in Europe could be short-lived also dented oil prices.

Comments from the International Monetary Fund’s managing director Christine Lagarde did little to help the mood.

In a guest article for German daily Handelsblatt, she said global economic growth will be "disappointing" next year.

"In many countries the financial sector still has weaknesses and in emerging markets the financial risks are increasing. All of that means global growth will be disappointing and uneven in 2016," she said, pointing to low productivity, ageing populations and the effects of the global financial crisis.

In corporate news, shares in aerospace and defence group Rolls-Royce nudged a touch lower following a report that MPs are set to meet boss Warren East to discuss his restructuring plans amid concerns for UK jobs.

Shares in online grocery distributor Ocado fell sharply, with market participants attributing the slump to news that Amazon plans to expand its 'Pantry' grocery delivery service in the UK.

Elsewhere, Swiss bank Julius Baer rallied after saying it has reached an agreement in principle with US authorities to settle a probe of alleged tax evasion.

On the macroeconomic front, US pending home sales are due at 1500 GMT.

French and UK equity markets will be open for a half day on New Year’s eve, but Germany’s DAX will be closed.