(Bloomberg) -- European stocks ended slightly lower on Wednesday, dragged in part by dire economic data, while investors bought into more defensive areas of the market such as health stocks and big consumer staples.
The Stoxx 600 Index ended 0.4% lower after a range-bound session, while still managing to stay above its 50-day moving average. Among top gainers, chipmaker Dialog Semiconductor Plc jumped 14% as analysts cheered the company's first-quarter results and outlook, while Virgin Money UK Plc and Direct Line Insurance Group Plc also got a boost from earnings.
Investor confidence has been tempered by the impact of the lockdowns put in place to contain the virus, which was apparent from Wednesday's economic data, showing that a recession in southern Europe is deepening even as the overall PMI reading for the euro area was slightly better for April.
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Businesses are also feeling the pain, with BMW AG's shares losing 5.4% after the German carmaker lowered its profit outlook for the year due to the pandemic. French lender Credit Agricole SA saw its provision to cover souring loans surge, posting mixed results, while Italy's UniCredit SpA reported a second loss in a row due to virus provisions.
While easing lockdown measures in some countries such as Germany, Spain and Italy have buoyed sentiment, some investors remain cautious.
“It's going to be a very slow and long process for re-opening, and on that basis we think the markets have gone slightly ahead of themselves,” Brian O'Reilly, head of market strategy at Mediolanum Asset Management, said by phone. O'Reilly added that markets could trade sideways over the next few months as they digest economic data, which are going to be “really bad,” and the opening up of economies.
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