Europe midday: Stocks push higher as Deutsche Bank gains

European stocks rose on Tuesday as Deutsche Bank recovered from recent losses, with equity markets in London boosted by a weaker pound.

At midday, the benchmark Stoxx Europe 600 index was up 0.6%, Germany’s DAX was 0.4% higher and France’s CAC 40 was 0.7% firmer.

Meanwhile, oil prices retreated. West Texas Intermediate was down 0.8% to $48.42 a barrel and Brent crude was 0.7% lower at $50.53.

In currency markets, the pound slumped to a 31-year low against the dollar as Theresa May’s pledge to trigger Article 50 by March continued to weigh on the currency. Sterling dropped to $1.2764 from $1.2858 late in New York on Monday. It briefly popped higher after the UK construction purchasing managers’ index for September came in stronger than expected.

The drop in sterling benefited FTSE 100 exporters, helping to propel the index back above the 7,000 mark.

CMC Markets’ Michael Hewson said: “Reports that UK Prime Minister Theresa May is not looking for any favourable treatment for the financial services sector has been cited as one reason behind the latest sterling decline, however this concern doesn’t appear to be reflected in the share prices of financials today, all posting gains.”

On the corporate front, Deutsche Bank was in the black, recovering from last week’s losses despite there being no news on the US Department of Justice fine.

US-listed shares in the lender surged on Friday after a media report suggested the DoJ fine could be reduced from $14bn to $5.4bn. On Monday, The Wall Street Journal reported that talks between the two were ongoing and no settlement has been reached.

Elsewhere, French luxury group LVMH was also higher after saying it will buy an 80% stake in German luggage maker Rimowa for €640m.

Budget airline Ryanair flew a little higher after reporting a 13% jump in traffic for September to 10.8m customers.

Education publisher Pearson rallied after Morgan Stanley reiterated its ‘overweight’ stance on the stock, saying the profit warning investors were fearing was unlikely to materialise.

Astrazeneca was a little lower after it announced a disappointing drug trial but said its Tagrisso drug has been recommended by NICE.

Figures released by Eurostat earlier showed eurozone producer prices unexpectedly edged lower in August.

Producer prices fell 0.2% from July compared to expectations for a 0.1% increase. On the year, prices were down 2.1%, in line with economists’ expectations.

Energy sector prices fell 0.8% and prices of intermediate goods declined 0.1%. Prices for both capital goods and durable consumer goods were stable, while prices for non-durable consumer goods were up 0.1%.

Excluding energy, prices in total industry were stable.

In the EU-28 group of nations, producer prices were down 0.2% on the month and 1.6% on the year.