European stocks edge higher with vaccine challenges and earnings in focus

European stocks nudged higher on Tuesday, with investors focusing on an emerging battle between vaccine maker AstraZeneca and the EU, and on political uncertainty in Italy.

The pan-European Stoxx 600 hovered 0.3 percent above the flatline in early trade, with financial services adding 1.3 percent while travel and leisure stocks fell 0.9 percent.

Italian shares will be watched closely on Tuesday as a new political crisis has come to the fore.

Biggest movers

Spanish utility Naturgy saw its shares surge more than 15 percent in early trade after the IFM Global Infrastructure Fund made a 5 billion euro ($6.06 billion) offer for a stake in the company.

EQT shares climbed more than 10 percent after the Swedish private equity firm beat full-year profit expectations and agreed to buy Exeter Property Group.

At the bottom of the European blue chip index, Rolls-Royce shares fell more than 8% after the airplane engine manufacturer revised down its 2021 outlook amid fresh Covid-19 travel restrictions.