Europe midday: Stocks lower as investors eye French election, Syria air strikes

European stocks were trading lower as the French election officially kicked-off on Monday, while investors were also keeping an eye on developments between Russia and the US following the US missile attack on Syria.

At midday, the benchmark Stoxx Europe 600 index was down 0.17% to 380.60, Germany’s DAX fell 0.3% to 12,187.85 and France’s CAC retreated 0.62% to 5,103.57.

Meanwhile, Brent crude rose 0.73% to $55.65 per barrel and West Texas Intermediate was up 0.64% to $52.58.

In currency markets, the euro fell 0.1% versus the dollar to 1.0580 and down 0.24% against the pound to 0.85349.

Jitters seeped in ahead of the first round of voting for the French presidential election on 23 April. Among the five front-runners, polls have shown that that far-right Marine Le Pen and the independent centrist Emmanuel Macron are the favourites for the run-off on 7 May, with Macron the eventual victor.

However, not only have pollsters’ predictions been made questionable by the presidential victory of Donald Trump in the US and the Brexit vote in the UK, but factors including a large number of undecided voters and last-minute tactical voting could play a part.

Far-left Jean-Luc Mélenchon has gained ground recently, having recently overtaken Socialist candidate Benoît Hamon and according to two polls at the weekend also taking third place from scandal-hit François Fillon.

Analysts at Deutsche Bank, said that Mélenchon's recent surge could be seen as a repeat of 2012 and current polls suggest that reaching the second round would be challenging for him.

They also said that if less than 60% of the electorate expressed a vote in the second round, Le Pen's chances of winning could be higher than currently perceived.

Meanwhile, France's central bank cut its first quarter GDP growth forecast by a tenth of a percentage point to 0.3% quarter-on-quarter. The growth forecast for the economy in 2017 was maintained at 1.3%.

Geopolitical tension remained high, after Russian president Vladimir Putin said the US had crossed a "red line" with its missile strikes on Syria last week, which US president Donald Trump had said was in response to a chemical attack on civilians by the Syrian government.

In corporate news, Stada climbed 11.04% after the German pharmaceutical accepted a buy-out offer from US private equity firms Bain Capital and Cinven of €66 per share, valuing it at €5.32bn.

Daimler fell 0.44% after the carmaker offered voluntary redundancies to workers at its Mercedes Benz truck unit in a bid to cut annual costs by €400m.

BHP Billiton rose 4.54% as activist investor Elliott Management urged the company's directors to cancel the miner's London listing in a unification with its Australian headquarters and to dispose of its US petroleum business. The hedge fund said these measures would result in shareholders enjoyed a 51% increase in the attributable value of their shares.