Europe midday: Stocks extend gains as economic data improves

(Sharecast News) - European stocks were putting in a decent performance on Wednesday as improving economic data and rising hopes of loosening monetary policy in the US lifted sentiment. The Stoxx 600 index was up 0.5% by lunchtime, extending gains as the FTSE 100 - the only major index in the red in morning trade - trimmed losses by midday.

Economic sentiment in the eurozone ticked a little higher in November, according to a survey released on Wednesday. The European Commission's economic sentiment indicator (ESI) for the bloc rose to 93.8 from 93.5 in October, coming in a touch above consensus expectations for a reading of 93.7.

However, despite the rise, the numbers "remained consistent with the economy contracting Q4," said Capital Economics research assistant Pollyanna Hall.

In the UK, mortgage approvals jumped last month despite borrowing costs continuing to push higher. According to the Bank of England's latest Money and Credit report, gross mortgage lending fell to £16.2bn from £18.1bn in September. However, net mortgage approvals - an indicator of future borrowing - for house purchases jumped to 47,400 from 43,700 a month previously. Consensus had been for a smaller increase, to 45,300.

US stock futures were pointing higher in pre-market trade, with the S&P 500 nearing a four-month high, after dovish comments the previous session from Federal Reserve governor Christopher Waller.

Waller, a well-known hawk, said that current monetary policy was working to slow the economy and bring inflation closer towards the 2% target.10-year US Treasury yields were continuing to drift lower, down 3.4 basis points at 4.291%.

According to the CME FedWatch tool, the chance of a Fed rate cut of at least 25 basis points in March had increased to 42%, compared with 21% on Tuesday.

"With inflation heading lower, Waller stated that we could see rates cut in three, four or five months. Markets currently price a first rate cut in May, and thus it appears as though the Fed are encouraging calls for a swifter return to easing than markets currently expect," said analyst Joshua Mahony from Scope Markets.

German inflation figures will be out at 1300 GMT, followed by GDP figures from the US at 1330 GMT. Then there's another barrage of data scheduled for Thursday but the focus will be on inflation figures from the eurozone and US, both expected to show a slowdown in core price growth.

Ferrovial rises on Heathrow sale

Spanish infrastructure firm Ferrovial was trading higher after agreeing to sell its entire stake in FGP Topco, the parent company of Heathrow Airport, for £2.4bn. Ferrovial will sell a 10% stake to the Saudi Public Investment Fund (PIF) and a 15% stake to French private equity firm Ardian.

Luke Bugeja, chief executive of Ferrovial Airports said: "Over the last 17 years, we have been contributing to Heathrow's transformation, together with our fellow shareholders, achieving some excellent milestones throughout our long-term role as investor."

French car maker Renault was rising after confirming that it is moving ahead with plans to spin off its electric-car division Ampere into a publicly listed company, despite doubts surrounding an IPO and potential dilution of value for investors.