Europe midday: Equity markets push lower in choppy trade; BMW tumbles

LONDON (ShareCast) - (ShareCast News) - European equity markets fell back into the red in choppy trade, with auto stocks under the cosh as BMW (Swiss: BMW.SW - news) skidded, overshadowing an upbeat reading on German business confidence. At midday, the benchmark Stoxx Europe 600 index was down 0.9% and France's CAC 40 was 1% weaker. The DAX was the worst performer, however, down 1.6% as car maker BMW tumbled 8% following a report in German newspaper Auto Bild that one of its diesel vehicles exceeded EU pollution limits by 11 times.

European shares had risen briefly earlier after a report released by the German research institute Ifo showed business confidence improved unexpectedly in September, hitting its highest level in four months.

The Ifo business climate index rose to a seasonally-adjusted 108.5 from 108.3 in August, ahead of expectations for a reading of 108.

The business expectations index increased to 102.3 from 102.2 and better than estimates of 101.5.

The current assessment index, however, fell to 114 in September from 114.8 in August, missing expectations for a reading of 114.7.

Volkswagen (Other OTC: VLKAF - news) was faring a lot better than BMW, up for a second day in a row after the company's chief executive Michael Winterkorn announced his resignation on Wednesday on the back of the emissions scandal. A successor is expected to be chosen at a meeting on Friday.

Monte dei Paschi (Milan: BMPS.MI - news) di Siena was firmly on the front foot after it settled with Nomura over a derivative trade called "Alexandria" that hit the bank's profits.

Elsewhere, Hennes & Mauritz slipped after the Swedish clothing retailer said its third-quarter profit was hit by dollar strength.

In London, shares in tour operator Thomas Cook (Xetra: A0MR3W - news) rose sharply after it said 2015 summer holidays were 91% sold, in line with expectations and at the same level as 2014.

Clothing retailer Next (Other OTC: NXGPF - news) was among the top performers on the FTSE 100 after Nomura upgraded the stock to 'buy' from 'neutral'.

Still to come on the macro calendar, US durable goods orders and initial jobless claims are at 1330 BST, while new home sales are at 1500 BST. Investors will also eye a speech by Federal Reserve Chairwoman Janet Yellen at 2200 BST.

"With it still being very much unclear if and when the Fed will finally pull the trigger and hike rates any major economic data releases are likely to be closely watched for the time being," said Markus Huber, senior analyst at Peregrine & Black .

"Concerning Yellen's speech tonight it is expected that she will pretty much talk along the same lines as during the FOMC press conference showing no immediate urge to raise rates but ready to do so when needed. Of particular interest will be the Q&A following afterwards which might shed a bit more light on if a rate hike for October is really an option or if December or even 2016 are much more likely."