European stocks hold steady after wobbly start to week

European stocks held steady on Wednesday as investors favoured real estate and healthcare stocks over economically sensitive sectors, on rising concerns over a spike in global Covid-19 cases. The pan-European Stoxx 600 index inched down 0.02 per cent, with automakers and miners falling the most.

Sectors considered more stable during times of economic uncertainty, such as healthcare and real estate rose, while travel and leisure stocks clawed back some losses from earlier this week.

UK shares initially found some relief after data showed British inflation fell to the Bank of England’s 2 per cent target last month in an unexpectedly sharp slowdown. However, UK’s blue-chip FTSE 100 slipped 0.2 per cent and the FTSE 250 mid-cap index inched up 0.3 per cent.

After opening nearly flat, the German Dax and France’s Cac 40 fell more than 0.2 per cent.

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“Inflation stepped off the accelerator in July, but this doesn’t mean we’re set for a gentle ride,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown. “The underlying pressure on prices, particularly from soaring petrol and second-hand car prices, means it’s set to pick up speed again soon, and may well hit 4 per cent by the end of the year.”

A much stronger-than-expected earnings season and improving economic data in Europe pushed the benchmark Stoxx 600 to its longest winning streak in over decade last week. However, pandemic-related worries and uncertainty around central bank actions stalled those gains.

Investors will keep an eye out for the US Federal Reserve's minutes from the its July policy meeting later in the day, for hints on when it will start tapering its massive asset purchases programme. Danish brewer Carlsberg rose 2.5 per cent after it raised its full-year earnings outlook and said beer volumes in key markets China and Russia had risen to "well above" pre-pandemic levels. Swiss medical device maker Alcon jumped 9 per cent after it lifted its full-year earnings forecast, while online pharmacy chain Zur Rose fell 6.6 per cent after disappointing first-half results. - Reuters