Europe midday: Stocks push lower on profit-taking as focus shifts to ECB

European stocks pushed lower on Monday, with investors taking profits after recent gains as the focus shifted to this week’s European Central Bank meeting.

At midday, the benchmark Stoxx Europe 600 index was down 0.8%, while Germany’s DAX and France’s CAC 40 were both 1% lower.

Meanwhile, oil prices were in the black, with West Texas Intermediate up 1.3% to $36.38 a barrel and Brent crude 0.9% firmer at $39.06.

“European markets have opened the week slightly lower, pausing for breath after the 10% gains seen over the last three weeks. Investors, whose profit and loss may have looked awful a month ago, now have a difficult decision to make in determining whether this is a good exit point, or if global stock markets will continue to trend higher,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.

“China's National People's Congress has confirmed the government's priority of sustaining growth in the face of painful structural change. However, with little new information released so far this week there has been nothing said that might push markets higher. This is reflected in weaker industrial metal prices this morning, although oil continues to recover from its recent lows.”

Over the weekend, China outlined plans for an economic expansion of between 6.5% to 7% this year, down from last year’s target of around 7%.

In corporate news, shares in EDF tumbled after the French energy company confirmed that chief financial officer Thomas Piquemal has quit. Although the group did not give a reason for his exit, a media report over the weekend suggested he was leaving due to concerns over the Hinkley Point nuclear plant.

German chemicals group BASF slipped after a press report it was considering a counter bid for US rival DuPont, which has already agreed a merger with Dow Chemical.

In London, Barclays was under the cosh after Deutsche Bank cut its rating on the stock to ‘hold’ from ‘buy’, while Anglo American slid after UBS downgraded it to ‘sell’ from ‘neutral’.

On the upside, Old Mutual surged after the insurer said it was considering all the options available under its strategic review amid media reports it is planning a multi-billion pound break-up.

Earlier, data from Destatis showed German manufacturing orders slipped 0.1% in January from the previous month amid lower domestic demand. Although this was not as bad as the 0.3% drop economists had been expecting, Pantheon Macroeconomics said the figures highlighted sluggish manufacturing.

The focus this week will be on the ECB rate announcement and ensuing press conference on Thursday.

Deutsche Bank said expectations are once again running high ahead of the meeting but some caution is warranted.

It said the market was pricing in a 13 basis points facility cut, a six-month extension of quantitative easing and a €10bn increase in the pace of QE.