Europe midday: Stoxx holds gains as French confidence vote in focus

(Sharecast News) - European stocks held gains at midday on Monday with a confidence vote over French budgetary plans in focus.

The pan-regional Stoxx 600 was up 0.21% at 550.4 at 1139 BST. France's CAC 40 rose 0.48% ahead of the vote, while Germany's DAX increased 0.73%.

French Prime Minister Francois Bayrou is expected to lose the vote he called in response to strong opposition to his proposed €44bn worth of budget cuts aimed at lowering the country's deficit.

"Political turmoil in France is drawing attention today, with the Prime Minister, Francois Bayrou largely expected to lose a confidence vote. He called the snap poll given the supreme difficulties he's faced pushing through spending cuts," said Hargreaves Lansdown analyst Susannah Streeter.

"France is grappling with a highly disillusioned electorate, resistant to austerity moves, which makes reducing the country's large deficit highly tricky. His ejection will mean President Macron will be forced to name the fifth prime minister in the France in less than two years."

"France is being seen as the most 'troublesome child' in Europe when it comes to fiscal position. But it's the prime ministers who keep being expelled for being unable to tame unruly lawmakers and impose spending restraint.

In economic news, German exports registered a surprise fall in July while industrial output rose, according to official data published on Monday.

Exports from Europe's biggest economy fell by 0.6% on a monthly basis, Federal statistics office Destatis said. Analysts had been expecting a 0.1% rise. Imports dropped 0.1%.

The foreign trade balance produced a €14.7bn surplus, down from €15.4bn in June and €17.7bn a year earlier.

Meanwhile, industrial production rose 1.3% in July compared to the previous month and against expectations of a 1% rise.

In China, exports rose 4.4% in August, below expectations for a 5.5% increase as the impact of US tariffs started to hit home. Imports grew by just 1.3% against an estimated 3.4%.

On the equities front, shares in retirement savings and income business Phoenix Group fell, despite the company saying it was "firmly on track" to hit its medium-term targets after a strong first half, during which profits surged by a quarter.

Ryanair fell after Goldman Sachs lowered its rating the stock, while Marks & Spencer rose as Citi lifted its rating on the UK retailer to 'buy' from 'neutral'.

Reporting by Frank Prenesti for Sharecast.com