Europe midday: Shares up despite weak EZ services survey data

(Sharecast News) - European shares shrugged off political turmoil in South Korea and France to post gains at the start of trading on Wednesday. The pan-regional Stoxx 600 index was 0.31% up to 517.30 in early deals with all major bourses higher. France's CAC 40 was 0.44% higher even as Prime Minister Michel Barnier looked likely to be toppled in a no-confidence vote over his controversial Budget.

The extreme right National Rally party said it would support the motion tabled by left-wing parties but had also planned to introduce its own no-confidence motion.

"Michel Barnier's belt tightening budget has gone down like a lead balloon with his opponents. Leading a minority government forcing through hugely unpopular measures is a highly precarious position to be in," said Hargreaves Lansdown analyst Susannah Streeter.

"If he is defeated, which looks likely, France will be weighed down by a burdensome budget deficit while another political vacuum opens. If difficult decisions are put off clouding the economic horizon, it won't help business confidence and may limit investment and recruitment and could lead to further wariness among consumers."

In South Korea, the won started to stabilise after President Yoon Suk Yeol reversed his decision to impose martial law after huge demonstrations and an emergency vote by parliament blocking the move. Yoon now faces an impeachment vote by lawmakers.

Meanwhile, Germany's DAX passed the 20,000 mark for the first time in its history.

In economic news, industrial producer prices in the eurozone increased as expected in October, according to figures out on Wednesday from Eurostat.

The producer-price index for the single-currency region increased by 0.4%, following a 0.6% monthly decline in prices in September. This was in line with the consensus estimate.

Eurostat said a 1.4% increase in energy prices and small gains in the cost of durable and non-durable consumer goods drove the change month-on-month, while the price of intermediate goods slipped 0.1% and capital goods remained stable.

Excluding energy prices, which tend to be volatile, the producer price index was unchanged from the previous month following another flat reading in September.

Meanwhile, a widely followed survey showed that the Eurozone economy slipped into contraction in November after services output slumped.

The Hamburg Commercial Bank Eurozone composite PMI output index, which recovered to reach the neutral 50.0 benchmark in October, fell back to 48.3 in November, a 10-month low.

On the equities front, shares in UK-listed shipping company Frontline surged after third-quarter earnings.

Hexagon shares gained as the company named former ABB chief Bjorn Rosengren as next chair of the Swedish industrial technology company.

Vestas Wind fell sharply after the wind turbine maker said its chief financial officer Hans Martin Smith would step down by the end of the year.

Reporting by Frank Prenesti for Sharecast.com