Defensives drag down European shares from four-month highs

(Reuters) – European shares slipped on Wednesday as investors turned their focus back to earnings reports and a surge in coronavirus cases, after an EU-wide debt deal sent the region’s markets to four-month highs in the previous session.

The pan-European STOXX 600 <.STOXX> was down 0.3% by 0722 GMT, easing from its strongest close since March 5.

Defensive sectors led Europe lower, with healthcare <.SXDP>, utilities <.SX6P> and consumer companies <.SX3P> among the biggest drags, with media <.SXMP>, down 1.0%, falling the most.

Investors took cheer from European Union members reaching a deal on Tuesday over a 750-billion-euro ($864.68 billion) coronavirus recovery fund, while hopes are also high that Washington will deliver a new round of stimulus.

Swiss engineering firm ABB Ltd rose 2.4% after saying its order situation could improve in the coming months.

French car parts maker Valeo SA fell about 5% after it swung to a 1.2 billion euro loss in the first half of 2020, after production was hit due to the pandemic.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)