(Reuters) – European stock markets edged higher on Wednesday as hotspot Italy looked set to relax strict curbs put in place to contain the coronavirus, with investors remaining cautious about a swift recovery as more companies issued worrying financial forecasts.

The pan-European STOXX 600 index was up 1.1%, after tumbling more than 3% on Tuesday following a historic collapse in oil prices.

While almost all the major European sectors were trading higher, real estate .SX86P and telecoms .SXKP stocks were among the top gainers, suggesting traders were still seeking the most stable stocks at a time of heightened volatility.

“In general we still see markets as being a bit fragile here,” said Graham Secker, chief European equity strategist at Morgan Stanley.

“As we go through the corporate earnings season, for an investor it’s difficult because we don’t know what the consensus is and how the numbers are necessarily perceived. We’re trying to sniff out how corporates are thinking about the next 12-to-18 months rather than the next few weeks.”

The benchmark STOXX 600 has bounced about 21% from a March low, powered by aggressive global stimulus, and all eyes will now be on a European Union summit on Thursday to discuss using a joint long-term budget to restart economic growth.

Still, the index remains about 24% below its February record high as strict stay-at-home orders virtually shut down business activity and crushed supply chains and consumer spending, foreshadowing a deep economic slump.

Banking shares .SX7P gained about 1.8%, even as the region’s top lenders prepared to follow their American peers in setting aside billions to cover potential loan losses due to the coronavirus outbreak.

Energy stocks .SXEP added about 0.9% on Wednesday after plunging 4% in the previous session as U.S. crude futures crashed for a second straight day and global benchmark Brent LCoc1 hovered at its lowest since 1999.

“Just as policymakers’ response to the economic aftershocks from COVID-19 will not be enough to stave off a global recession, so oil supply reductions will not lead to higher prices unless demand starts to pick up,” said Konstantinos Venetis, senior economist at TS Lombard.

Analysts now estimate earnings at STOXX 600 companies to slide 37% in the second quarter and 27.6% in the third, quashing earlier expectations that an earnings recession would end in 2019.

Gucci-owner Kering (PRTP.PA) slumped 6.3%, a day after saying sales were hit hard early in the coronavirus crisis due to the fashion group’s reliance on Chinese customers and that it was premature to say how quickly China sales would rebound.

Roche Holding AG (ROG.S) rose 1.5% as the Swiss drugmaker confirmed its 2020 sales and profit outlook amid rising demand for its new COVID-19 tests.

Dutch paints and coatings maker Akzo Nobel (AKZO.AS) jumped 7.7% to the top of the STOXX 600 after reporting a jump in first-quarter profit, but it warned the full impact of the pandemic was still to come.

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