Europe close: Stocks level out as most government bond yields fall back

European stocks ended higher for the most part on Wednesday despite mixed corporate earnings as government bond yields fell back, although Greek sovereign debt prices continued to trade well below where they began the year in a possible sign of still significant jitters among investors.

The benchmark Stoxx Europe 600 index was up 0.33% to 363.94, Germany’s DAX was off 0.05% at 11,543.38 and France’s CAC 40 gained 0.26% to 4,776.60.

Mike van Dulken, head of research at Accendo Markets, said: “Major equity markets are positive but gains rather muted by weak oil prices following a big US stockpile build that fuels concern about rising US production trumping OPEC cuts.

“This is weighing on risk appetite, adding to European (and US) political jitters and fresh interest in both fixed income bonds and traditional safe havens like gold.”

Nevertheless, by the closing bell Brent crude was up 0.39% to $55.27 per barrel and West Texas Intermediate higher 0.36% to $52.36 - despite US government data showing a large build in stockpiles for the latest week - while gold reached a three-month high, to above $1,237 a troy ounce.

The euro edged higher by 0.13% against the dollar to 1.0702 and was down 0.03% against the pound to 0.8539.

Greece was still in focus amid concerns about the country’s ability to repay it debts. A report by the International Monetary Fund released on 7 February said the country would fail to hit its budget-surplus targets set under the bailout terms by its creditors following its annual assessment.

Yields on the benchmark two-year Greek government bond retreated 12 basis points to 9.36%, after climbing sharply higher in recent weeks and in the preceding session, but remained well above the 7.44% mark at which they started the year.

French 10-year bond yields were down by 11 basis points to 1.01%.

In corporate news, Danish shipping giant AP Moller-Maersk dropped 4.98% after it posted a $2.68bn quarterly loss and halved its dividend.

Carlsberg also fell 2.54% after the Danish brewer swung to a profit in the second half of the year, but revenue fell.

London listed Tullow Oil was down 8.58% after the oil and gas explorer said that full-year revenue and profit fell, although losses narrowed, whereas Sanofi rose 0.99% after the French pharmaceutical’s fourth quarter profit more than doubled.

Norwegian insurer Storebrand gained 3.28% after it beat earnings forecasts and will pay a its first dividend in six years.

Vinci was up 4.68% after the French construction firm said late on Tuesday that it will hike its dividend and predicted an increase in revenue for 2017.

German airline Lufthansa which gained 1.27% following positive Air France traffic figures and a upgrade of its stock to ‘buy’ from Société Générale.