Europe Markets

European Stocks Pare Losses to Close Flat

European shares ended mostly flat on Wednesday, bouncing off intraday lows as many investors used the early dip to boost their exposure to equities, with mining shares the main drag.

The FTSEurofirst 300 Index index of top European shares unofficially closed 0.01 percent higher at 1,160.36 points, after losing as much as 0.5 percent earlier in the session.

The benchmark index - which is already up 2.3 percent so far this year and has hit a near-two-month high earlier this month - has surged 8.8 percent since mid-November as fading fears of a break-up of the euro zone prompted investors to scoop up the region's equities.

"Europe's catch-up rally is set to continue," said Roland Kaloyan, strategist, global asset allocation, at Societe Generale CIB.

"There is no reason to switch out now. Markets are flooded with liquidity, low volatility levels are supporting inflows, and valuations are still attractive."

Mining shares were among the day's losers, falling along with metal prices as investors remain cautious over China's economic outlook. Rio Tinto fell 0.9 percent and Vedanta Resources dropped 1.4 percent.

Banking stocks reduced their losses following good earnings by Wall Street firms Goldman Sachs and JPMorgan. The European banking sector closed 0.42 percent lower at 175.62 points.

European markets

Earlier on Wednesday, the European Automotive Industry Association released figures showing demand for new cars fell to its lowest level last year since 1995, with sales down 16.3 percent in December. Autos, including Peugeot Citroen, Fiat and Renault, fell as a result but pared losses at the close.