European stocks closed higher on Wednesday, extending gains from earlier in the week despite the coronavirus outbreak.
The pan-European Stoxx 600 reversed early losses to close provisionally over 1% higher, with auto shares leading the gains while only telecoms traded in the red.
Reuters said a Chinese TV media outlet had reported that a research team at Zhejiang University had found an effective drug to treat people with the new coronavirus. The news agency, citing traders, suggested this was a reason for the move higher in stocks.
Investors have been trying to weigh the economic impact of the outbreak, and the World Health Organization said that cases surged to 24,363 over the last 24 hours, “the most cases in a single day since the outbreak started.”
On Wall Street, stocks followed the positive momentum overseas, with all the major U.S. indexes in the green. The Nasdaq, however, pared gains slightly as Tesla shares plummeted following a monster rally.
In other news, oil prices rose on Wednesday, boosted by OPEC and non-OPEC producers including Russia (an alliance collectively known as OPEC ) discussing potential further output cuts to counteract a potential drop in global oil demand amid the coronavirus outbreak. The OPEC committee met again Wednesday.
On the data front, final purchasing managers' index (PMI) readings showed that euro zone business activity made a solid start to 2020, beating preliminary estimates to rise to a five-month high of 51.3 in January from December's 50.9.
Germany led the positive surprises, its service sector growing at its strongest pace in five months to rise to 54.2 from 52.9 in December.
New jobs Earnings in focus
BNP Paribas posted a slightly better-than-expected fourth-quarter net profit of 1.84 billion euros ($2 billion) but cut its profitability outlook, sending the French lender's shares nearly 1% higher.
Danske Bank posted flat net profits for 2019 and warned that its 2020 profit could almost halve amid pressure from a 200 billion euro money-laundering scandal and negative interest rates. Danske Bank shares initially fell, before trading 0.5% higher.
Infineon surged 11% after meeting profit expectations and confirming its forward guidance.
Siemens reported a 3% fall in net profit in its fiscal first quarter, weighed down by weakness in the auto and energy sectors, but saw its shares edge 0.6% higher. The German conglomerate announced plans to buy Iberdrola's stake in Spanish wind turbine maker Siemens Gamesa, which in turn took its shares almost 6% higher.
New jobs Biggest movers
Valmet Corp was the biggest climber in the Stoxx 600 on Wednesday, adding nearly 15% after the Finnish tech company increased its financial targets on the back of a strong fourth quarter.
GN Store Nord gained almost 9% after the Danish hearing aid manufacturer reported strong fourth-quarter earnings.
At the other end of the European benchmark, Imperial Brands tumbled 7% after issuing a profit warning in its first-quarter trading update.