Europe close: Stocks bounce back helped by updates from Shell, Redrow

European stocks rebounded on the back of upbeat news from Royal Dutch Shell and UK housebuilder Redrow as investors eyed the latest set of policy minutes from the US Federal Reserve.

"It is a different story in Europe, where indices have generally been able to hold on to at least some of their gains, but with Wall Street struggling it will be tough for European markets to really establish the groundwork for a sustainable bounce," said IG chief market analyst Chris Beauchamp.

"Tonight's Fed minutes should keep sentiment in check too, since investors will be keen to see if the record of the meeting sheds any further light on the hawkish shift seen in the dot plot, even if some of that shift in outlook was walked back in the weeks following the FOMC’s latest decision."

The pan-European Stoxx 600 index was up 0.78% to 459.53 after a fall on Tuesday, when fears over the global economic recovery sparked a sharp drop in US and Eurozone bond yields.

Investors were also eyeing the release of the US Federal Reserve's latest policy meeting minutes later in the day for any indication on the timeline for asset purchase tapering.

Germany's DAX outperformed with a rise of 1.17% to 15,692.71, despite data showing a contraction in industrial production after Tuesday's unexpected 3.7% decline in factory orders.

Gains on the FTSE Mibtel and Cac-40 were more restrained with each gaining 0.23% and 0.31%, respectively, as Covid-19 worries continued to dampen investor sentiment.

In the UK, June average house prices fell 0.5%. "We are beginning to see some concern that the fading benefits of the stamp duty holiday could soon see demand grind to a halt," said IG analyst Joshua Mahony.

"That being said, much of that decline was driven by the midlands and London, with the rest of the country gaining ground throughout June. The past year has seen such huge numbers of home moves, bringing reservations around how much demand there will be for housebuilders going forward."

In equity news, shares in Redrow gained 3.15% as the housebuilder said 2022 revenues should exceed £2bn.

Shell shares slipped 0.08% evn after it said it would boost its returns to shareholders via share buybacks or dividends.

The oil major said it would increase distributions to between 20% and 30% of cashflow from its operations thanks to a rebound in its core business and an improving outlook.

Rival BP lost 1% with the sector generally lower as well, mirroring another drop in oil futures. Brent futures reversed early gains, falling 1.87% to reach $73.14 a barrel.

Miners BHP, Rio Tinto and Antofagasta were all up as copper and iron ore prices rose.

German software company SAP was up after an upgrade to “buy” from Bank of America.

On the downside, stock in 888 Holdings slumped even as it said it expects adjusted annual core profit to be slightly higher despite higher costs and regulatory changes. Sector peer Entain was also lower.