European stocks closed mixed on Wednesday as investor caution returned following U.K. Prime Minister Boris Johnson's vow to block an extension of EU trade talks beyond 2020, reviving fears of a "cliff-edge" Brexit.
European markets
The pan-European Stoxx 600 closed flat with sectors and major bourses pointing in different directions.
Johnson on Tuesday used the power of his newly won parliamentary majority to set a hard deadline of December 2020 to reach a new trade deal with the EU, with the U.K. set to leave the bloc by January 31, in a bid to strong arm the bloc into hastening an accord.
With a phase one U.S.-China trade deal now agreed, Reuters reported Tuesday that U.S. President Donald Trump's administration is finalizing a set of narrow rules limiting exports of sophisticated technology to China and other adversaries. U.S. tech companies may receive some reprieve having feared a more stringent crackdown.
On Wall Street, slim gains were capped as investors digested weak earnings from shipping giant FedEx.
In corporate news, Fiat Chrysler and Peugeot owner PSA on Wednesday confirmed a binding agreement over an approximately $50 billion merger to form the world's fourth-largest automaker.
The German Ifo business climate survey released on Wednesday showed that business morale rose more than expected in December to hit a six-month high, indicating that Europe's largest economy may have picked up steam in the fourth quarter despite persistent manufacturing sluggishness.
British inflation held steady at a three-year low of 1.5% in November, well below the bank's 2% target, while euro zone inflation accelerated to 1% year-on-year in November from 0.7% in October, boosted by a steeper climb in food prices.
Stocks on the move
Volvo shares climbed 3% after the Swedish automaker announced a strategic alliance with Japan's Isuzu Motors, German takeout service Delivery Hero added 2%.
Pearson shares added 2% after the company announced the sale of its remaining stake in Penguin Random House.
At the other end of the European benchmark, Ipsen shares fell 4% after the company announced the departure of its CEO, while Kion Group shares slid 3.9%.