Europe midday: Stocks mixed after eurozone data; ADP report eyed

At midday, the benchmark Stoxx Europe 600 index was up 0.3%, Germany’s DAX was 0.1% weaker and France’s CAC 40 was 0.6% firmer.

At the same time, oil prices were in the red. West Texas Intermediate was down 0.6% to $46.08 a barrel while Brent crude was 0.8% lower at $47.99.

Investors were likely to be exercising a little caution ahead of the release of the US ADP employment report later in the session, as it is widely considered a precursor to Friday’s all-important non-farm payrolls.

The payrolls will be watched particularly closely after Federal Reserve Chair Janet Yellen said at Jackson Hole last Friday that the timing of the next interest rate hike will depend on the strength of economic data in coming weeks.

In terms of sectors, miners were under pressure after analysts at Clarksons Platou Securities said iron ore prices could drop below $50 a metric ton before the year-end. The Stoxx 600 basic resources index fell 1.8%.

In corporate news, Commerzbank and Deutsche Bank racked up healthy gains after Germany’s Manager Magazin reported that DB had in the past looked at the possibility of a merger with Commerzbank. However, Deutsche’s chief executive later dismissed the idea.

Iliad was on the front foot as the French phone carrier posted a rise in first-half sales and earnings.

French telecommunications company Bouygues was also in the black as it said net profit in the second quarter increased and stuck to its full-year revenue and earnings targets.

888 Holdings rallied as favourable sports results and strong casino winnings lifted its first-half numbers, helping to make up for its failed plot to buy William Hill.

Diploma edged higher as it said underlying sales grew 2% in the year to September, with acquisitions and the weak pound helping to lift statutory revenues 14%.

FTSE 250 builders merchant Grafton Group tumbled as it reported a rise in first-half pre-tax profit as revenue grew thanks in part to strong performances in the Netherlands and Ireland, but warned of a challenging backdrop in UK merchanting.

On the macroeconomic calendar, figures from Eurostat showed the eurozone unemployment rate was unchanged in July.

The unemployment rate came in at 10.1%, steady compared to June and down from 10.8% in July last year. It fell short of analysts’ expectations for a nudge down to 10%.

Meanwhile, inflation in the block came in lower than expected for August, according to a flash estimate by Eurostat, which could prompt the European Central Bank into action.

Inflation was stable compared with July at 0.2%, which was below economists’ expectations of 0.3%, as prices of food, industrial goods and services rose less than the previous month.

Core inflation – which strips out energy – was down to 0.8% from 0.9%, below estimates for it to remain unchanged.