Europe midday: Stocks mostly higher in choppy trade as autos rebound
European stocks were mostly higher in choppy trade, helped by a rebound in the auto sector and some encouraging Eurozone data.
At midday, the benchmark Stoxx Europe 600 index was down 0.2%, but Germany’s DAX and France’s CAC 40 were 0.3% firmer.
Data released early showed economic confidence in the Eurozone edged slightly higher in September, as the region seemed untroubled by a potential slowdown in China.
The European Commission’s economic sentiment indicator – which combines the business and consumer measures – rose from 104.1 in August to 105.6 in September, reaching its highest level since June 2011.
Analysts had expected the index to remain unchanged from the previous month.
Meanwhile, the sub-index tracking industrial confidence exceeded expectations, coming in at -2.0 against consensus of a -3.8 reading and compared with the 3.7 figure registered in the previous month.
Autos were on the front foot, bouncing back from recent heavy losses on the back of the Volkswagen debacle, with the Stoxx 600 index for the sector up 1.6%.
Meanwhile, Volkswagen recovered some of its earlier losses to trade just marginally lower as it prepares to face multi-billion dollar lawsuits over the emissions scandal. VW’s new chief executive Matthias Mueller on Tuesday outlined the company’s “comprehensive” plan of action to ensure its diesel models will be able to meet emissions standards.
Also on Tuesday, it emerged the stock will be removed from the Dow Jones Sustainability Indices from 6 October due to the emissions cheating.
Glencore rallied, recovering from a 29% fall on Monday, which saw the stock hit its lowest since its IPO in 2011, after Investec said its equity value is zero at current spot prices.
Citigroup and Bernstein came out in defence of the mining giant, saying the market’s response to concerns around balance sheet and liquidity, as seen through the sharp drop in the shares and rise in CDS spreads, was overdone and the stock still hold values.
Plumbing and heating equipment supplier Wolseley tumbled after the company posted a drop in full-year pre-tax profit and warned of challenges in the UK market.
Still to come on the data front, German CPI is at 1300 BST, while in the US, S&P/Case-Shiller house prices are at 1400 BST and consumer confidence is at 1500 BST.