BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks traded lower on Wednesday after initial gains as investors continue to digest continued optimism about coronavirus vaccines and easing of concerns over U.S. President-elect Joe Biden's transition to the White House.
The European Central Bank, in its latest Financial Stability Review, said weak profitability prospects continue to weigh on bank valuations. According to the ECB, lenders might require higher loan loss provisions amid missed payments and rising number of corporate defaults.
The COVID infection rate in many European countries are slowing down. In Germany, Chancellor Angela Merkel is proposing a further tightening of the restrictions until at least December 20, with gatherings of up to 10 people on Christmas and New Year holidays.
French President Emmanuel Macron announced a three-stage relaxation on restrictions and that will begin on Saturday.
In the U.K., authorities approved relaxation of the restrictions on Christmas after a fall in new infections.
UK finance minister Rishi Sunak is set to unveil spending review for the financial year 2021-22. He will announce more investment to help the economy during his appearance before the Parliament.
The pan European Stoxx 600 traded down 1.59 points or 0.41 percent at 390.80. Germany's benchmark DAX was down 23 points, or 0.2 percent, at 13,270 after gaining 1.3 percent the previous day.
France's CAC 40 index declined 10 points, or 0.2 percent, at 5,549 after rising 1.2 percent on Tuesday.
U.K.'s FTSE 100 traded down 37 points or 0.6 percent at 6,395, after advancing 1.6 percent in the previous session.
Asian stocks ended mostly higher on Wednesday amid optimism in the progress of coronavirus vaccines and the formal start of U.S. President elect Biden's transition to the White House.
On the German corporate side, Deutsche Bank stock was up 3.8 percent. Automaker Volkswagen Group's stock declined 2.6 percent after Bloomberg reported that chief executive officer Herbert Diess is struggling to receive support for his candidates to fill two executive posts. He is also asking the company board to support more significant reforms.
In France, Alstom SA stock gained 2.3 percent and Knorr - Bremse AG stock increased 2.9 percent after their consortium signed a contract with the Cologne Public Transport Authority for the supply of 64 low-floor trams valued at 363 million euros.
In U.K., Elementis shares were trading up 2.6 percent after the specialty chemicals and personal care business rejected a revised all-cash takeover offer from Minerals Technologies Inc.
Melrose Industries Plc stock grew 3.9 percent after the company reported that it is currently trading at the top end of the Board's expectations for 2020, driven by faster than expected recovery in automotive markets.
Genus plc stock gained 5.7 percent after the company said its trading for the four months ended October 31 was ahead of expectations.
AA Plc stock increased 7 percent after the roadside recovery company agreed to be acquired by private equity groups TowerBrook Capital Partners (U.K.) LLP and Warburg Pincus International LLC.
United Utilities stock was up 3.7 percent after first-half positive earnings results, while Future plc stock was losing 13.7 percent.
In Switzerland, Basilea Pharmaceutica AG stock gained 5.3 percent after the marketing authorization application for the antifungal isavuconazole (Cresemba) for invasive aspergillosis, which was submitted by the company's license partner Pfizer (PFE), has been accepted for regulatory review in China.
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