Europe midday: Stocks gain despite weak inflation data for May

As of 1210 BST the benchmark Stoxx 600 was edging higher by 0.17% to 391.18, alongside gains of 0.46% in Germany's Dax to 12,657.15 and an advance of 0.25% in the Cac-40 to 5,319.36.

Data on euro area unemployment for April came in stronger than forecast, even as the latest readings on inflation within the single currency bloc appeared to validate the 'dovish' stance recently from European Central Bank boss Mario Draghi, according to analysts.

Figures from Eurostat revealed that unemployment in the Eurozone fell from a downwardly revised rate of 9.4% for March to 9.3% in April (consensus: 9.4%).

Joblessness for March had originally been pegged at 9.5%.

In parallel, Eurostat reported that price pressures decelerated more quickly than anticipated.

Those figures showed that momentum in underlying inflation was weak, according to Fabio Fois at Barclays Research.

The year-on-year rate of increase in the euro area's consumer price index retreated from a 1.9% clip in May to 1.4% for April (consensus: 1.5%).

Core prices also missed forecasts by a tenth of a percentage point, with their rate of advance slowing from 1.2% to 0.9%.

"Net out the calendar-led volatility services inflation spike due to the different Easter timing this year compared to last, and core inflation returned to a level reached at the start of the year and was only marginally above levels reached in May 2016," Fois said.

Commenting on Wednesday's price action in markets, Michael Hewson, chief market analyst at CMC Markets UK said: "Recent weakness in European markets has been a little tough to square with the continued improvement in economic data that has come out of Europe since the beginning of the year.

"Strong economic surveys from Germany, France, Italy and Spain suggest that the improvements seen in Q1 will be carried into the rest of the first half of this year, particularly since most of the political risk is now in the rear view mirror."

Still on the economic calendar for Wednesday, the Chicago NAPM's manufacturing sector purchasing managers' index for May was set for release at 14:45 BST, followed by the US central bank's so-called 'Beige book' at 19:00 BST.

Shares in Germany's flag carrier Deutsche Lufthansa edged higher after chief Peter Garber told Handelsblatt its cargo arm had made an "encouraging" start to the year.

Stock in E.On was up on the heels of a report that it had taken Goldman Sachs on board to explore options for a sale of its remaining stake in Uniper.