European shares inch up, all eyes on euro zone fiscal package
By Susan Mathew and Sagarika Jaisinghani
(Reuters) - European stock markets inched higher to post a third straight day of gains of Wednesday, tracking a rally on Wall Street, but sentiment remained fragile with all eyes on whether euro zone finance ministers will agree an economic rescue package.
The pan-European STOXX 600 index <.STOXX> ended up 0.02%, reversing earlier losses of as much as 1.5%. Equities posted a strong start to the week on hopes that the rate of coronavirus infections was plateauing in western Europe and the United States. [MKTS/GLOB]
While the daily death toll rose again in Spain, and France became the fourth country to register more than 10,000 deaths from the virus, Wall Street rallied on hopes that the outbreak was close to its peak in the United States.[.N]
London shares <.FTSE> closed down 0.5%, paring earlier losses of up to 2%, while the main index in Paris <.FCHI> finished 0.1% higher.
Euro zone finance ministers have struggled to agree a coordinated economic support package despite several calls for common debt issuance to back businesses impacted by the outbreak.
"The impression it gives the world is that Europe is disjointed, and that will reinforce the view that the overall response will be slower and less impressive than elsewhere," said Kit Juckes, a macro strategist at Societe Generale in London.
Energy <.SXEP>, mining <.SXPP>, insurers <.SXIP> and bank stocks <.SX7P> were among the biggest decliners. Defensive real estate stocks <.SX86P> gained 1.4%, while travel and leisure <.SXTP> led with a 3.3% rise.
Graphic - Sector performances in Europe so far this year: https://fingfx.thomsonreuters.com/gfx/mkt/jznpnjqgplm/EU.png
UK insurers, including Direct Line
Sources said carmaker Renault's
The pan-region benchmark index has gained about 20% since hitting an eight-year low on March 16, boosted by aggressive global stimulus measures, but remains 25% below its all-time high.
The chairman of the euro zone finance ministers, Mario Centeno, suspended talks on a half a trillion euro package until Thursday, sending the 10-year Italian bond yield to its highest since March 19.[GVD/EUR]
"If we did get confirmation that Europe was moving towards joint liability, debt issuance etc, even if it's relatively small, setting the precedent would be a powerful signal," said Graham Secker, chief European equity strategist at Morgan Stanley.
With countries doubling down on lockdowns to curb the spread of the virus, analysts have further cut profit estimates for STOXX 600 firms, with first-quarter earnings now expected to slide 15.7% compared with the Jan. 1 forecast of a 10.5% rise.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sherry Jacob-Phillips and Arun Koyyur; Editing by Kirsten Donovan)