Europe midday: Stocks little changed amid latest coronavirus updates

14 February 2020

(Sharecast News) - Stocks in Europe had steadied come midday following a mixed start to the session as investors tried to understand what the spike in confirmed coronavirus cases the day before, due to a change in methodology by Chinese officials, really meant.
Following the latest update from the World Health Organisation and clarifications regarding those "changes", Drs Adam Barker and Tara Raveendran at ShoreCap said they did not alter the "underlying dynamics" of the contagion, which was slowing down.

Indeed, the change to a less specific method of confirming cases, known as computer tomography, was meant - and rightly so - as a way to cast the net wider in order not to miss any cases.

Be that as it may, in the background some researchers were warning of the risk of a much wider contagion globally, possibly in the billions.

Against that backdrop, as of 1241 GMT, the benchmark Stoxx 600 was trading 0.13% higher to 431.62, alongside a 0.19% gain for the German Dax to 13,771.53 and a 0.09% dip for the FTSE Mibtel to 24,869.55.

To take note of, euro/dollar was up 0.02% to 1.0843 but earlier hit an intraday low of 1.0827.

Also weighing on investor sentiment, on Thursday evening the US central bank slightly reduced its plans for buying Treasury bills and for conducting overnight repurchase operations.

French energy group EdF was at the top of the leaderboard for the Stoxx 600 after posting a more than four-fold increase in full-year net income attributable to the group of €5.2bn, with reported recurring net income of €3.9bn (consensus: €2.4bn).

The company's guidance for full-year 2020 operating profits of €17.5-18.0bn was also ahead of analysts' estimates.

Italian payments specialist Nexi's shares continued climbing alongside.

Renault was among the worst performers after the carmaker posted a nearly 30% decline in group operating income.

On the economic side of things, German gross domestic product figures for the last three months of 2019 fell short of forecasts, but some economists were not overly worried.

According to the country's ministry of finance, GDP was flat quarter-on-quarter (consensus: 0.1%), weighed down by slower spending by households and the public sector.

But Berenberg's Holger Schmieding advised clients to take the latest readings with a "pinch of salt".

"Solid gains in real disposable incomes and still elevated levels of consumer confidence suggest that the data will either be revised up for late 2019 or show a significant snapback for early 2020," he said.

"Also, Germany looks set to step up its slow-motion fiscal stimulus from c0.3% of GDP in 2019 to c0.4% this year as the supply constraints holding back public investment growth are easing."