European equities closed at their highest in almost two weeks on Wednesday, as investors switched their focus to company earnings and cheap equity valuations after disappointment at a Franco-German summit had led to losses earlier in the session. The European market was choppy, amplified by low volume as many traders and investors were on summer holidays.
Volume on the FTSEurofirst 300 index of top European shares was just 78 percent of its 90-day daily average. On the FTSE 100 index it was just 76 percent. The FTSEurofirst 300 index ended 0.3 percent firmer at 971.87, its highest close since August 5. It had earlier fallen to a low of 955.94 as a summit between French President Nicolas Sarkozy and German Chancellor Angela Merkel failed to calm investor jitters over the euro zone debt crisis.
Drugmakers featured among the top gainers after sharp declines in the previous two weeks. The sector index, still down more than 7 percent this month, was up 1.1 percent Sanofi rose 2.8 percent after Deutsche Bank ranked the French drugmaker among 25 European "quality names" that provide good value for investors following a sell-off. Miners were also in demand, with the sector index rising 0.9 percent, as key base metals prices rose on buying interest from Asia and on a weaker dollar.
Stock exchange operators fell after Sarkozy and Merkel unexpectedly unveiled a plan for a Europe-wide tax on financial transactions. Germany's co-operative banking association said any such tax - often known as a Tobin tax after economist James Tobin, who first suggested one in the early 1970s - would fail to bring stability to markets if it only operated in the eurozone. Deutsche Boerse DB1Gne and London Stock Exchange Group fell 5 percent and 2.8 percent respectively.
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