Europe midday: Stocks turn higher as investors wade through earnings

European stocks shook off early losses to trade higher, with investors sifting through a raft of earnings as they looked to Thursday’s eagerly-awaited European Central Bank meeting.

At midday, the benchmark Stoxx Europe 600 index was up 0.4%, Germany’s DAX was 0.9% higher and France’s CAC 40 was up 0.8%.

Stocks headed south in the previous session, after the release of an upbeat lending survey from the European Central Bank caused investors to scale back their expectations that the central bank will announce additional stimulus measures at its meeting on Thursday.

The survey showed credit standards for Eurozone companies eased more than expected in the third quarter as banks made use of the central bank’s asset-purchase programme to grants loans.

“The APP had a net easing impact on credit standards and particularly on credit terms and conditions. The easing impact was greatest for loans to enterprises,” the ECB said.

However, it seemed market participants were reassessing the chances of further stimulus on Wednesday.

“With Japan flagging and China only slowly stabilising, [ECB President] Draghi might want to act in a pre-emptive manner, after all any measures taken usually take several months sometimes in excess of a year to filter through to the economy,” said Markus Huber, senior analyst at Peregrine & Black.

Data released earlier by Japan’s Ministry of Finance showed exports rose just 0.6% in the year to September, hit by waning demand from China and falling well short of analysts’ expectations for a 3.4% increase.

On the corporate front, chip designer ARM Holdings surged after posting a jump in third-quarter pre-tax profit as revenue grew on the back of premium chip pricing and the broadening adoption of its technology. The company also said it has entered the final quarter of the year with strong royalty momentum.

Sky gained as it reported a strong first quarter book, with new paid-for subscription products boosting the company’s revenue.

Shares in Swiss agrochemicals group Syngenta rose sharply on news that chief executive Mike Mack will leave the group at the end of October.

Consumer goods company Reckitt Benckiser was also on the front foot after lifting its full-year like-for-like sales growth estimate to 5% from a previous range of between 4% and 5% as it released better-than-expected third-quarter results.

On the downside, shares in education group Pearson tumbled after it cut its earnings guidance range for the full year by 5p to 70p-75p as it reported a 4% drop in third-quarter underlying sales.

Credit Suisse fell after announcing plans to raise $6.3bn in a capital increase.