By Sruthi Shankar
LONDON (Reuters) – European shares recovered on Wednesday as gains for Swedish truck maker Volvo and defensive sectors offset worries about a hard Brexit that continued to pressure UK mid-cap shares.
The pan-European STOXX 600 <.STOXX> inched up 0.3% to near Monday’s record high, encouraged by a Conservative victory in UK elections and a preliminary U.S.-China trade deal.
Encouraging corporate updates from several large companies helped to drive markets higher.
Shares in Volvo AB
British education company Pearson
Most regional indexes were trading higher. Germany’s DAX <.GDAXI> recovered some losses after the Ifo Institute reported German business morale rose more than expected in December, a sign that a manufacturing crisis in Europe’s largest economy may be bottoming out.
However, domestically focused UK stocks <.FTMC> fell 0.5% amid worries about British Prime Minister Boris Johnson’s taking a hard line on Brexit. London’s exporter-heavy FTSE 100 <.FTSE> rose 0.2% as the pound erased all its from the Tory victory.
“Clearly, Brexit is a big worry and some of the euphoria over the U.S.-China trade deal is wearing off, too,” said IG Markets analyst Chris Beauchamp. “It’s not surprising to see the stocks struggling a bit to get the momentum.”
Defensive sectors such as healthcare, food and beverage and utilities led gains on the main STOXX 600 index.
Among other stocks, Peugeot maker PSA
Shares in Swedish bank SEB
Among losses, Danish luxury TV and stereo maker Bang & Olufsen
Shares in French drugmaker Ipsen
(Reporting by Sruthi Shankar, editing by Larry King)