Europe midday: PMI survey lifts Stoxx; Munters on the slide

(Sharecast News) - European shares were higher on Wednesday amid another earnings dump as investors continued to monitor the latest cat and mouse game between US President Donald Trump and his tariff targets, while a positive survey of eurozone economic activity boosted sentiment.

The pan-regional Stoxx 600 index was up 0.18% to 537.06. France's CAC-40 and Germany's DAX were both lower.

China remained in focus as the world's second-largest economy retaliated with tariffs of its own against the US. Canada and Mexico earned a 30-day reprieve against export levies, largely by offering Trump policies on border control they had already announced.

Meanwhile, the US banned the import of small parcels, hitting the likes of Shein and Temu, both of which rely on the $800 import-tax free threshold.

Investors are awaiting what threats the president will make against the European Union, with the 27-nation bloc saying it would respond in kind to any measures imposed.

There was also astonishment at Trump's suggestion to remove Palestinians from the virtually destroyed Gaza Strip to other countries and rebuild it as a "Riviera of the Middle East".

"Trump is playing a treacherous trade game, with threats of tariffs still dangling over major economies, while the tit for tat game with China is escalating," said Hargreaves Lansdown analyst Susannah Streeter.

"Although a mini wave of relief cascaded over financial markets after duties on Canadian and Mexican imports were delayed, the effects of tariffs on Chinese goods are now causing fresh ructions. The Shanghai Composite Index and Hong Kong's Hang Seng have fallen back after the Lunar New Year holiday as traders assess the repercussions."

"E-commerce stocks the hardest hit after US postal service suspended indefinitely incoming parcels from China and Hong Kong."

In economic news, activity across the eurozone turned positive in January for the first time in five months, according to final estimates out on Wednesday from S&P Global and Hamburg Commercial Bank (HCOB).

The eurozone composite purchasing managers' index rose to 50.2 last month after a reading of 49.6 in December, in line with the flash estimates released two weeks ago.

This was the first time above the neutral 50-point mark since August.

In equity news, shares in Novo Nordisk were up as sales of its Wegovy obesity drug helped boost profits at the Danish drug giant.

Banco Santander surged as it reported a sharp rise in annual profits.

Munters plunged as it reported fourth-quarter results.

Reporting by Frank Prenesti for Sharecast.com