Europe midday: Stocks push higher despite weaker oil prices

European stocks rose on Tuesday, bouncing back from the previous session’s losses despite weak oil prices, as investors continued to eye this week’s speech by Federal Reserve Chair Janet Yellen at Jackson Hole.

At midday, the benchmark Stoxx Europe 600 index and Germany’s DAX were up 0.8%, while France’s CAC 40 was 0.7% firmer.

At the same time, oil prices remained under pressure as hopes of a production freeze faded and amid reports that Iraq – OPEC’s second-biggest producer – was set to ramp up its exports. West Texas Intermediate was down 3% at $47.05 per barrel and Brent crude was 1.2% lower at $48.59.

Goldman Sachs stuck to its forecasts that oil would remain at $45-$50 a barrel through next summer. “We reiterate our view that the oil price and fundamental recovery remains fragile,” the bank said.

Investors were also looking ahead to Yellen’s speech on Friday for further clues on the timing of an interest rate hike.

On the corporate front, housebuilder Persimmon rallied after reporting a better-than-expected jump in first half pre-tax profit of 29% to £352.3m.

UniCredit was also in the black following a report that the chief executive of Polish insurer PZU was heading to Milan for talks to buy Bank Pekao from the Italian bank.

BHP Billiton got a boost as Jefferies lifted its recommendation on the stock to ‘buy’ from ‘hold’.

In macroeconomic news, Markit’s flash eurozone composite purchasing managers’ index unexpectedly nudged up in August to a seven-month high.

The composite PMI printed at 53.3 compared to 53.2 the month before, beating expectations for it to edge down to 53.1.

The services PMI rose to 53.1 from 52.9 in July, which was a three-month high and ahead of expectations for a reading of 52.8.

Meanwhile, the manufacturing PMI slipped to 51.8 from 52.0, missing forecasts for it to be unchanged and reaching a three-month low.

Stephen Brown, European economist at Capital Economics, said: “August’s slight rise in the euro-zone composite PMI suggests that, despite shrugging off the UK’s Brexit vote, economic conditions remain fairly subdued.”