Europe midday: Stocks little changed as investors bide their time ahead of US jobs data

(Sharecast News) - European markets were mostly heading higher on Thursday, following strong gains on Wall Street and Asian indices overnight, as bond yields retreated from their recent highs. Worth noting, investors were expectant ahead of the release of the monthly U.S. non-farm payrolls data the next day, which might decide whether the selling pressure on bonds abated or not in the very near term.

By 1206 BST, the Stoxx 600 index was up just 0.3% at 441.32.

Most of the main regional indices were a tad higher alongside save for the French Cac-40 which was off by 0.01% to 6,996.18.

The Stoxx 600 index has fallen for seven out of the past ten trading sessions, dropping 4.2% during that period.

Front dated Brent was off by 1.42% to $84.39 a barrel on the ICE.

German and Italian 10-year government bond yields were little changed but those on similarly-dated Spanish debt were down slightly.

"Markets are constantly exhibiting forward-looking behaviour, and for today, it could simply be a case where folks are starting to think that bond vigilantes are wearing out their welcome," said Stephen Innes, managing partner at SPI Asset Management.

"The US labour market is set to remain in the spotlight today, as well as tomorrow when we get the September non-farm payrolls report, which after yesterday's slowdown in the ADP numbers, could set the seal on another rate hike in November, or keep markets guessing ahead of next week's CPI report," chipped in analyst Michael Hewson from CMC Markets.

In European economic data on Thursday, the HCOB Eurozone construction purchasing managers' index pointed to a further marked deterioration at the end of the third quarter, with new business sales dropping to their lowest level since May 2020. The PMI rose slightly to 43.6 in September from 43.4 in August but remained firmly in negative territory (ie under 50).

French industrial output declined by 0.3% in August after a revised -0.5% in July, but the decline in Spanish industrial output worsened to 0.8% from a revised +0.1% in July.

Meanwhile, the German trade surplus fell to €16.6bn in August, down from a revised €17.7bn in July but above the €15bn forecast.

In stock movements, oil and gas stocks were out of favour after the dramatic drop in crude prices on Wednesday, with BP, Shell, TotalEnergies and Repsol all registering losses.

Shares in Pandora surged in Copenhagen after the Danish jewellery group said it expects organic growth of 7-9% from 2023 to 2026.