Europe midday: Stocks struggle for direction

European equity markets were little changed on Friday, struggling for direction as oil prices fell back and investors awaited a speech from Federal Reserve Chair Janet Yellen.

At midday, the benchmark Stoxx Europe 600 index was up 0.1%, while Germany’s DAX and France’s CAC 40 were both flat.

At the same time, oil prices were on the back foot after Brent crude breached the $50 a barrel mark on Thursday for the first time since November. West Texas Intermediate was 0.8% lower at $49.09 a barrel and Brent crude was down 1.1% at $49.05.

“Markets here, and in the US and Asia have lost momentum after big gains midweek,” said Lee Wild, head of equity strategy at stockbroker Interactive Investor.

“A drop in oil prices back below $50 and caution ahead of Fed chair Janet Yellen's speech tonight will make it difficult for them to make much headway, especially ahead of a long weekend in the UK. Revisions to US first-quarter GDP later could also fuel another dollar rally. A Fed rates meeting next month, the EU referendum and weak corporate earnings make this a tricky time for investors, and many are sitting on cash.”

Market participants will be watching out for Yellen’s speech at Harvard at 1530 BST, as they look for further clues on the timing of the next Fed rate hike, although there is a chance she may not address monetary policy at all.

Societe Generale said: “Little emphasis on the monetary policy outlook is expected at this event. The appearance to look forward to will be the Chair’s speech in Philadelphia on June 6, the Monday following the May employment report and a day before entering the blackout period for the upcoming FOMC meeting.

In corporate news, Swiss pharmaceutical company Roche rallied after announcing positive results from its trial of drug Gazyva.

Spain’s Banco Popular was under the cosh again a day after it announced a rights issue.

AstraZeneca nudged lower after the phamaceuticals giant announced positive results for its Faslodex drug for the treatment of metastatic breast cancer, but also said US regulators will not currently approve its new drug for high potassium levels because of a manufacturing issue.

Investors were also digesting headlines from the Group of Seven meeting in Japan, where political leaders warned of rising risks to the global economy.

Coming up, the second release of first-quarter US GDP is due at 1330 BST, while University of Michigan consumer sentiment is at 1500 BST.