Europe midday: Stocks slightly higher as Trump concerns subside

European stocks crawled slightly higher by noon on Tuesday, recovering from lows in the previous session amid little major local data as concerns subsided about US president Donald Trump ability to push through his fiscal policies.

At midday, the benchmark Stoxx Europe 600 index was up 0.2% to 375.77, Germany’s DAX rose 0.6% to 12,067.84 and France’s CAX was flat at 5,018.68.

In currency markets, the euro was flat versus the dollar at 1.0860 and down 0.1% against the pound to 0.86418.

Meanwhile, Brent crude was up 0.7% to $51.11 per barrel and West Texas Intermediate rose 0.76% to $48.10.

Investors had been worried about Trump’s ability to deliver on his pans for tax cuts and infrastructure spending after Republican leaders withdrew their support for his healthcare bill last week.

The increased volatility hints at rising stress across stock markets, suggested that recent gains could be temporary in the dirt of concrete action within the context of the US fiscal policy, according to Ipek Ozkardeskaya, senior market analyst at London Capital Group.

“The sentiment vis-à-vis the ‘reflation’ trade is weakened following Trump’s defeat on his health-care replacement plan, which has somehow been perceived as a warning that the ‘phenomenal’ fiscal reforms could bump into resistance as well”, she said.

Elsewhere, investors were also avoiding taking big risks ahead of British Prime Minister Theresa May triggering Article 50 on Wednesday and start formal divorce proceedings with the EU.

In corporate news, E.On was up 1.14% after the German utility said it will return to debt markets with a sale of up to €3bn new bonds.

Wolseley surged 5.88% after the building materials supplier unveiled a jump in half-year profits, a name change to Ferguson, an exit from the Nordic region due to lack of synergies and said it will start reporting in US dollars ahead of what analysts see as a likely flip to a US listing.

Insurer Aviva gained 1.05% following a report that it is looking to sell Friends Provident International in a deal that could fetch up to $750m.

Thomas Cook fell 2.46% after it said its winter programme is closing out as expected.