Europe midday: Stocks turn lower as investors book some profits

European stocks reversed early gains to trade a little lower on Friday as investors booked some profits at the end of what has been a pretty solid month and ahead of some key US data releases.

At midday, the benchmark Stoxx Europe 600 was down 0.2%, while Germany’s DAX and France’s CAC 40 were 0.3% weaker.

Markus Huber, senior analyst at Peregrine & Black, said the move lower was due in part to profit-taking, noting that markets have risen substantially not just over the past few weeks but even since Wednesday in the aftermath of the FOMC meeting.

“Many traders feel a bit uncomfortable to add to their long positions with markets being highly overbought in the short-term and valuations in some stocks getting slowly stretched again,” he said.

“Furthermore we have quite a bit of economic data later on which have the potential to move markets especially where the employment cost index and personal spending are concerned both will be closely watched by the Fed. Because of this and it being the end of the month, traders like to reduce a lit bit of their risk exposure for now.”

On the corporate front, Royal Bank of Scotland slipped after it said higher restructuring costs caused third-quarter pre-tax profit to slump to £2m from £1.1bn in the same period last year.

L’Oreal tumbled after its third-quarter revenue missed analysts’ expectations, while British Airways and Iberia parent International Consolidated Airlines Group fell sharply as quarterly numbers fell short of estimates.

On the upside, oil and gas company BG Group gained after its third-quarter core earnings came in better than expected, as it raised its full-year production guidance following a sharp increase in output in the period.

Airbus rallied after reporting a 12% rise in third-quarter core earnings from the same period a year ago and announcing the buyback of €1.1bn of shares.

BNP Paribas was also in the black after it posted a 14% rise in net income, beating analysts’ expectations, while Belgium-based brewer Anheuser-Busch InBev advanced after it said core earnings rose 9.6% in the third quarter.

French car maker Renault pushed up after it said third-quarter revenue increased by 9.4%,.

Investors also digested a slew of data releases.

Figures from Eurostat showed unemployment in the Eurozone grew slightly more than expected in September, while consumer prices fell flat in the current month, in line with analysts’ expectations.

Data from Destatis showed German retail sales stagnated in September. Retail sales were flat compared with a larger-than-initially estimated 0.7% decline in the previous month and analysts’ expectations for a 0.4% drop.

Still to come on the economic calendar, US personal income and spending and the employment cost index are at 1230 GMT, while Chicago PMI is at 1345 GMT and University of Michigan is at 1400 GMT.