European Stocks Slip Again

LONDON—Most European stock markets erased early gains to close lower, as investors were once again disappointed that an agreement on a second Greek rescue had yet to materialize.

The Stoxx Europe 600 index lost 0.2% Wednesday to end at 263.01. Although the index has fallen for three consecutive days, the combined losses have been a modest 0.6%.

Greece remained the center of attention as investors kept watch out for a deal on additional austerity measures, a prerequisite for finalizing the bailout deal.

Sentiment was underpinned for much of the day on suggestions that the European Central Bank is willing to exchange its holdings in Greek government bonds with the European Financial Stability Facility at a discounted price, which would allow Greece to tap the first tranche of its second bailout. But the modest gains evaporated into the closing bell on concerns that the ECB hadn't yet decided on whether it would contribute to a Greek debt restructuring deal.

The ECB talk nonetheless boosted banking shares. In Lisbon, Banco Espirito Santo surged 13% and Banco Comercial Português jumped 5.1%. Commerzbank leapt 7.6% in Frankfurt while Crédit Agricole rose 3% in Paris. UniCredit gained 2.2% and Banca Popolare di Milano advanced 2.3%, both in Milan.

Among major national benchmarks, the U.K. FTSE 100 index shed 0.2% to 5875.93, and Germany's DAX 30 index eased 0.1% to 6748.76. Both notched their third consecutive loss. The CAC 40 index fell fractionally to 3410.00.

More

• Stock Market Hits Pause
• Concession Smooths Way Toward a Greek Debt Deal

Mining stocks dropped. BHP Billiton lost 2.3% after reporting a 5.5% decrease in first-half profit due to rising costs, production disruptions and falling commodity prices. Glencore International, which announced its merger with Xstrata on Tuesday, fell 2%, while Xstrata edged down 0.2%.

Reckitt Benckiser gained 2.9% after reporting a 26% profit increase for the fourth quarter.

Wind-turbine maker Vestas Wind Systems sank 14% after reporting a loss for 2011 and indicating it may not be profitable in 2012 either.

Belgian telecom carrier Mobistar lost 9% after it reported a decline in fourth-quarter profit and forecast a drop in revenue for 2012.

Sanofi dropped 1.7% after warning that 2012 earnings would fall as new generic competition hits revenues.

Statoil added 1.3% after reporting solid earnings boosted by rising oil prices.

In the currency markets, the euro was trading at $1.3239 from $1.3261 late Tuesday, as investors awaited some concrete news on Greece. The U.K. pound traded at $1.5801 from $1.5898. The dollar was at €76.90 from €76.77.

Among commodities, light, sweet crude for March delivery was up 20 cents, at $98.61 a barrel, on the New York Mercantile Exchange. Gold for March delivery was down $13.30, to $1,733.80 a troy ounce on the Comex division of Nymex.

—Michele Maatouk contributed to this article.