Europe close: Stocks trim gains with Beijing Covid-19 outbreak in focus
Stocks finished modestly higher on Wednesday with some analysts crediting central bank support, even as investors kept a close eye on an outbreak of Covid-19 in Beijing and mounting numbers of new infections in the States.
Indeed, some reports around the new outbreak in China from companies with operations in the country were quite cautious.
"The numbers [of new Covid-19 cases] we're seeing are still small which offers some hope that the outbreak can be contained but they are rising rapidly," said Oanda analyst Craig Erlam.
"Investors are broadly turning a blind eye for now but they've done so before and it didn't work out too well."
By the end of trading, the benchmark Stoxx 600 had added 0.74% to 366.02, alongside a 0.54% rise for the German Dax to 12,382.14 while the French Cac-40 had put on 0.88% to 4,995.97.
Investors were also mulling news that the leaders of Austria, Denmark, the Netherlands and Sweden had sent a letter to the Financial Times making the case for a smaller and conditional reconstruction fund for the European Union.
EU leaders were due to meet on Friday in a first attempt to thrash out the details, with Chancellor Angela Merkel reportedly not expecting a breakthrough at the meeting.
Construction and Real Estate shares paced gains throughout much of the session, but by the close both had pared their advance. Healthcare issues on the other hand drew a bid all day long, with the Stoxx 600 finishing up by 1.86%.
Gains in the construction space came despite the latest data from Eurostat which revealed a 28.4% year-on-year drop in output from the sector at the euro area level in April.
In parallel, ACEA reported a 41.5% year-to-date decline in EU car registrations during May, with those in Spain, Italy and France having nearly halved.
Overnight, Spanish Prime Minister, Pedro Sanchez, called on a group of 100 leading economists to fashion a long-term blueprint to rebuild the country's economy.
Core consumer price inflation in the Eurozone was confirmed at up by 0.9% year-on-year in May, as expected, although analysts in the City emphasised how Eurostat was still estimating over a quarter of the underlying data using models given the disruptions caused by the pandemic.