Europe midday: Stocks erase early gains

(Sharecast News) - European stocks erased early gains and were trading in the red by Tuesday lunchtime as investors adopted a cautious approach ahead of the European Central Bank policy meeting later in the week. The Stoxx 600 index was down 0.1% at 510.13, having risen to an earlier high of 512.28 in morning trade, with benchmark indices in London, Frankfurt and Milan all providing a drag.

The pan-European Stoxx 600 has now fallen in six of the past seven sessions after hitting a record closing high of 525.05 on 30 August.

Investors will now be looking ahead to Thursday's European Central Bank policy meeting, after which a 25 basis-point cut in the deposit rate to 3.5% is widely expected.

In economic data on Tuesday, German inflation was confirmed at 1.9% in August, its lowest level in three and a half years, according to final estimates from Destatis. The year-on-year change in consumer prices eased from 2.3% in July and matched the preliminary estimate released two weeks ago. This was the first time the consumer price index has dipped below the key 2% mark since March 2021 as energy prices dropped 5.1%, compared with a 1.7% decline in July.

Meanwhile, the Office for National Statistics reported that the UK unemployment rate declined to 4.1% in the three months to July, from 4.2% previously, marking a six-month low and in line with economists' expectations. Meanwhile, growth in average earnings fell to 5.1%, hitting a two-year low but still well above the Bank of England's 2% inflation target.

Centamin, Carlsberg in focus

Shares London-listed gold miner Centamin surged nearly 25% after announcing an agreement to be taken over by AngloGold Ashanti in a £1.9bn deal. Others in the sector, such as Fresnillo, Hochschild Mining and Endeavour Mining were also putting in gains.

Danish brewer Carlsberg rose in Copenhagen despite the news that UK competition regulators are looking into the company's £3.3bn takeover of Britvic. The CMA announced on Tuesday it was issuing a preliminary "invitation to comment" but has not yet opened a formal investigation.

French software firms Capgemini and SAP were among the best performers after Wall Street gave a warm welcome to strong results from enterprise software giant Oracle after the close on Monday.

Heading the other way was AstraZeneca, dropping 4% as investors reacted to disappointing news from the UK company's latest lung cancer trials. Overall survival rates "did not reach statistical significance" in the TROPION-Lung01 trial, which evaluated AstraZeneca and Daiichi Sankyo's datopotamab deruxtecan versus chemotherapy.

Europe's listed hearing care companies Amplifon, Sonova, Demart and GN Store Nord were also heavy fallers after Apple announced that its new AirPods Pro 2 headphones could with clinical-grade hearing aid tech.