Europe midday: Gains stick despite increasingly uncomfortable stock strategists

"Stocks declined recently for fear the situation would turn into a global crisis, but the update from the WHO has acted as a green light to the bulls," said David Madden at CMC Capital Markets UK.

Yet overnight, Chinese authorities extended travel curbs to 10 cities with an approximate population of 40.0m people, with cases having now been detected in 32 of 34 of the country's provinces and public anger reportedly on the rise.

As of 1200 GMT, the benchmkark Stoxx 600 was 1.19% ahead to 425.0, alongside a gain of 1.40% for the German Dax to 13,576.45, while the French Cac-40 was 1.11% higher to 6,038.27.

Travel&Leisure stocks were still pacing gains on the heels of the WHO's decision, with the Stoxx 600 sector sub-index up by 1.47% to 260.90.

Basic Resources shares on the other hand were only putting in a half-hearted bounce following the previous session's sharp falls, adding 1.10% to 454.03.

And some strategists were incerasingly cautious, with those at Bank of America telling clients that if the US Federal Reserve signalled "carry on liquidity" at its policy meeting during the following week, then " irrational bullish phase continues in Q1".

In a separate note, BofA said it had turned "tactically neutral" on European equities, but stayed overweight cyclicals against defensives.

The same investment bank upgraded European autos from 'underweight' to 'overweight' and chemicals from 'marketweight' to 'overweight'.

For European utilities it was the opposite case, with BofA downgrading them from 'marketweight' to 'underweight' and software from 'overweight' to 'marketweight'.

On the economic side of things, IHS Markit's Purchasing Managers' Output Index for euro area manufacturing rose from 46.1 in December to 47.5 for January (consensus: 46.8).

Economic growth in the Eurozone failed to accelerate yet again at the start of 2020 but the worst of the downturn in manufacturing looked to have passed and business confidence across the single currency bloc notched up a 16-month high, the survey compiler said in a statement.

Shares of Carrefour were near the top of the leaderboard after the French grocer posted an acceleration in like-for-like sales to 3.1% in fourth quarter, helped by a return to growth in Spain and bumber sales in Brazil. Carrefour also guided towards a 7.4% rise in full-year recurring operating income to €2.09bn, with double-digit growth expected in its home market.

Elsewhere on the Paris bourse however, shares of Ipsen had gone into reverse in a big way after announcing that it stopped recruiting patients for phase III clinical trials of Palovarotene, a treatment for fibrodysplasia ossificans progressiva.

Its shares were 24% lower.

Sweden's Ericsson was another top faller on the Stoxx 600, shedding nearly 7% of its market value, despite posting a sharp turnaround in fourth quarter profitability versus the year before.

Scandinavia's largest tiremaker, Nokian Renkaat Oyj was also rolling lower at a brisk pace, falling 9% following its latest update to investors and weighing on stock of sector peer Pirelli.

Renault was also lower, by roughly 3%, adding to the previous session's retreat, as was K+S AG on the back of continued selling pressure on oil prices.

Remy Cointreau was also near the bottom of the pile, with its stock plummeting by about 9%, after the spirits maker posted a 9.7% fall in in third quarter sales to €290.2m and suspended its financial guidance, telling shareholders that it would outline a new strategic roadmap later in 2020.

Still ahead for later in the day, at 1400 GMT the Belgian central bank was set to release its business confidence index for January.

CAC 40 - Risers

Carrefour (CA) 15.40 +5.32%

Schneider Electric (SU) 94.97 +2.65%

Saint Gobain (SGO) 35.50 +2.43%

ArcelorMittal SA (MT) 14.30 +2.28%

Safran (SAF) 145.17 +2.16%

ST Microelectronics (STM) 27.50 +1.86%

Credit Agricole (ACA) 12.71 +1.74%

Airbus SE (AIR) 137.97 +1.60%

Danone (BN) 74.40 +1.48%

Accor (AC) 38.28 +1.45%

CAC 40 - Fallers

Renault (RNO) 35.90 -2.94%

Pernod Ricard (RI) 164.23 -0.95%

Valeo (FR) 29.00 -0.70%

Vivendi (VIV) 24.86 -0.47%