Europe midday: Stocks waver amid earnings deluge; FOMC eyed

European stocks were mixed in a tight range on Tuesday as investors sifted through more earnings ahead of key central bank meetings.

At midday, the benchmark Stoxx Europe 600 index was flat, France’s CAC 40 was 0.2% lower and Germany’s DAX was up 0.2%.

At the same time, oil prices were in the red. West Texas Intermediate was down 1% at $42.69 a barrel and Brent crude was off 0.6% at $44.44.

In corporate news, BP pushed lower after it posted a drop in second-quarter profit but maintained its dividend.

Mediaset shares tumbled amid reports Vivendi wants a revised pay-TV deal, while Commerzbank was on the back foot after reporting a drop in second-quarter profit and its capital buffer.

Michelin nudged a touch lower after it said first-half profit rose 9% despite a drop in sales.

On the upside, SABMiller edged higher after Anheuser-Busch InBev lifted its offer for the company.

BT Group was in the black after Ofcom said its infrastructure arm, Openreach, should be forced to become a distinct company with its own board, own staff and separate branding to give it independence from the larger group.

Faurecia rallied after the French car parts supplier reported a 56% jump in first-half net income.

Investors were looking ahead to rate announcements from the Federal Reserve on Wednesday and the Bank of Japan on Friday.

Michael Hewson, chief market analyst at CMC Markets, said: “There seems to be an expectation that perhaps this week’s Federal Reserve rate meeting could well come across as slightly more hawkish than markets were pricing a week ago.

“While the odds of an autumn rate rise still remain quite slim the fact remains that the percentage odds of a move on rates in the months from September until the year end haven’t shifted that much since the 13th June. Given recent data this would appear to suggest that the balance of probabilities for a move by the end of the year has shifted somewhat towards the upside, and that markets could be becoming complacent about it.”

Meanwhile, Bank of America Merrill Lynch said it does not expect the BoJ to adopt ‘helicopter money’ but it does expect it to double its ETF purchases.

“The Bank is likely to lower its price forecasts and we look for it to double its ETF purchases to around Y6tn annually and potentially lift its Japanese government bond purchase pace in line with the increased issuance from the fiscal stimulus plan.”

The European data calendar is pretty bare, but in the US, S&P/Case-Shiller house prices are at 1400 BST, while Markit’s services purchasing managers’ index is at 1445 BST. US consumer confidence is at 1500 BST, along with new home sales.