Still, a boost from healthcare stocks .SXDP helped the pan-European STOXX 600 shed early losses, and the index was last trading flat.
Wall Street fell more than 1% overnight after a media report questioned the validity of the results of U.S. drugmaker Moderna’s coronavirus vaccine trial that had sent stocks soaring on Monday.
A market recovery from March lows has stalled in May, as investors weigh the chance of a resurgence in coronavirus cases as many countries restart their economies after months-long lockdowns. The STOXX 600 is down 0.5% this month after a 6% jump in April.
“Investors are playing a waiting game,” said Edmund Shing, global head of equity derivatives strategy at BNP Paribas. “The reason for that is we want to see how the exit from lockdowns proceed and see how quickly each economy picks up.”
European markets have cheered a Franco-German proposal this week for a 500 billion-euro Recovery Fund that would bind all 27 European Union states to raise debt jointly to offer grants to regions hit hardest by the coronavirus pandemic.
However, Austrian Chancellor Sebastian Kurz said on Tuesday a group of EU states will propose funding the recovery efforts with loans, not grants.
A series of positive corporate updates limited losses in the markets.
Shares of British retailer Marks & Spencer jumped 4.0% after saying that it would accelerate its latest turnaround programme as it dealt with the fallout from the coronavirus crisis and reported a 21% fall in annual profit.
The world’s biggest credit data company Experian Plc gained 6.4% as it said its executive directors would take a 25% salary cut for six months, but forecast first-quarter organic revenue to decline by just 5% to 10%.
AstraZeneca Plc rose 1.3% after the U.S. Food and Drug Administration approved Merck Inc’s and its Lynparza as a treatment for a form of prostate cancer.
French food group Danone rose 0.8% after it confirmed it would pay out a 2019 dividend and that no share buyback operations would take place this year.
Swedish video game group Embracer tumbled 9.6% after weak quarterly report.