Europe midday: Stocks turn red on Eurozone growth forecasts

LONDON (ShareCast) - -China says EU probe harms debt efforts -WSJ -No decision on Spain deficit targets until all data is collected. -Unicredit (MDD: UCG.MDD - news) may tap ECB´s LTRO. FTSE-100: 0.25% Dax (Xetra: ^GDAXI - news) -30: -0.37% Euro Stoxx 50 (Zurich: ^STOXX50E - news) : -0.32% Cac (Frankfurt: 924169 - news) -40: -0.02%% Ibex 35 (Madrid: IBEX.MC - news) : -1.19% European equities have turned around and are now falling slightly again, after having registered modest gains this morning on the back of a better than expected reading on German business confidence and a positive reaction from investors to results out from several financial groups. A gloomy forecast for Eurozone GDP growth from the European Commission seems to be weighing on sentiment however. The European Union´s executive branch now sees growth in the single currency area falling by 0.3% in 2012, versus an earlier forecast for an increase of 0.5%. Acting as a backdrop, there are reports that China´s Premier (BSE: PREMIER.BO - news) may announce lower than expected economic growth targets. Interestingly, that may have implications for the prices of many commodities, the rise in which some believe could become an obstacle to faster growth in the West. Also worth mentioning are reports that the Netherlands may have softened its stance as regards an increase in the size of the Eurozone´s so-called firewall. EU leaders are expected to broach the subject at a summit on the 2nd of March. German chancellor Angela Merkel´s spokesman yesterday denied that any increase is necessary, although Europe´s growth locomotive is under increasing pressure to study such a possibility. Probably not lost on anyone either is the rise in oil futures today. EQUITIES French lender Natixis (Euronext: KN.NX - news) said fourth-quarter profit fell 32% to €302m, after writing down holdings of Greek sovereign debt. That was better than expected. Deutsche Telekom (Xetra: 555750 - news) has reported a net loss of €1.3bn for the fourth quarter and warned that underlying earnings will come in under analysts´ expectations this year. Allianz has raised its forecast for operating profits in 2012. Swiss Re has announced better than expected quarterly results and hinted at the possibility of paying out a special dividend. Commerzbank (Other OTC: CRZBF.PK - news) is down 5% after warning that it will not pay a dividend this year. From a sector stand-point the worst performers on the DJ Stoxx 600 now are: automobiles (-2.30%), travel (-0.67%) and construction (-0.66%). MACROECONOMY The IFO Institute´s German business confidence index for the month of February has risen to 109.6 (Consensus: 108.8). ISTAT´s Italian consumer confidence index for the month of February has risen to 94.2 points (Consensus: 92.1) from 91.8 the month before. Dutch consumer spending fell 1.3% year-on-year in December, after a fall of 1.2% the month before. The EU Commission forecasts a contraction in Eurozone-wide gross domestic product this year of 0.3%, versus the 0.5% previously foreseen. OTHER MARKETS Front month Brent futures are rising 1.02% to the $124.17/barrel level. The euro/dollar is rising 0.33% to the 1.3293 dollar mark. AB