Europe close: Stocks drift slightly lower on profit-taking

European stocks nudged lower on Wednesday amid weaker oil prices, with investors looking for fresh catalysts as the summer lull kicked in.

The benchmark Stoxx Europe 600 closed down by 0.20% or 0.69 points to 343.98 while France’s CAC 40 slipped 0.36% to 4,452.0 and Germany’s DAX closed 0.39% lower at 10,650.89.

At the same time, oil prices retreated, with West Texas Intermediate down 20% at $41.93 a barrel and Brent crude 1.74% weaker to $44.21.

The Stoxx 600 sub-index for oil and gas surrendered 0.70% to close at 279.60.

Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said European equity markets are slightly subdued as investors bank some profits after markets hit recent highs and the German index entered a bull market on Tuesday.

“However, with volatility almost non-existent, the bond market at historic lows and investors maintaining their dovish view of the Fed, investors have struggled to find alternatives to equities and they remain the asset class of choice,” she said.

On the corporate front, Novozymes tumbled after the Danish biotechnology company’s second-quarter results missed expectations, while German utility E.ON was also under the cosh after saying it swung to a loss in the first half.

William Hill was in the red after it rejected a £3.2bn takeover bid from Rank and 888 late on Tuesday.

On the upside, staffing company Adecco advanced after its second-quarter profit beat analysts' expectations.

Security firm G4S surged after it posted a 44% increase in first half earnings and said it has made substantial progress with the ongoing transformation of the group.

Shares in Peppa Pig owner Entertainment One were sharply higher after the company said it has rejected a takeover offer from broadcaster ITV that values it at 236p per share.

FTSE 250 payment solutions provider Paysafe – known as Optimal Payments before it merger with competitor Skrill in August last year – was on the front foot after posting a rise in first-half profit as it upgraded its guidance for 2016 revenue and adjusted earnings.

Support services group Interserve racked up healthy gains as it said it would exit its energy-from-waste business after taking a £70m exceptional charge.