Europe midday: Stocks slip amid negative news on US-China talks, Italian politics

Stocks on the Continent are trading slightly lower, amid reports that Beijing is backtracking on trade commitments with the US and reports of tensions in the Italian government.

According to multiple US government and private sector sources cited by Reuters, Beijing was playing the victim, having heavily edited a 150-page draft trade deal last Friday night, leaving a score of previously agreed commitments with Washington in tatters.

"China reneged on a dozen things, if not more [...] The talks were so bad that the real surprise is that it took Trump until Sunday to blow up," one the of the private sector sources reportedly said.

As of 1218 BST, the benchmark Stoxx 600 was down by 0.42% to 380.05, alongside a dip of 0.07% to 12,084.62 for the German Dax while the FTSE Mibtel was staging a retreat of 0.68% to 21,075.54.

Weighing on Italian issues was news that the country's Premier had removed League member, Armando Siri, from his post as Transport Undersecretary, stoking tensions in the ruling coalition.

Echoing the mood in markets on Wednesday morning, analysts at Barclays Research said: "We find the near-term risk-reward for equities less attractive now, and expect further consolidation [...] investor sentiment is bullish [...] but many geopolitical tail-risks remain.

"The bullish case mostly relies on central banks staying put and a US-China trade deal leading to a growth rebound, but this is a fragile equilibrium."

In the background meanwhile, Iran was threatening to resume high-level uranium enrichment, giving the remaining signatories to the 2015 nuclear deal - Britain, France, Germany, China and Russia - 60 days to deliver on promises to shield the country's oil and financial sectors from US sanctions.

Meanwhile, in Britain, there were reports that the chairman of the 1922 Committee had asked the country's Prime Minister to provide an outline for her plans to stand down by 1600 BST or risk being ousted in coming weeks.

News on the European economic front was mixed.

Industrial production figures in Germany covering the month of March surprised to the upside, revealing a 0.5% month-on-month rise in output (consensus: -0.5%), but Andrew Kenningham at Capital Economics was quick to point out the outsized contribution from construction, where production jumped by 1.0%.

"Even if the worst is now behind us, we suspect that German manufacturers will continue to struggle over the rest of the year," Kenningham said.

Shares of Wirecard were higher after the German payments outfit upped its full-year profit outlook while Spain's Amadeus was gaining

Stock in industrial conglomerate Siemens was also wanted on the heels of better-than-expected second quarter profits.

Commerzbank stock on the other hand relinquished early gains as first quarter net income printed at €120m, which was down from €262m one year ago and below the €123.7m forecast by analysts.