• The pan-European Stoxx 600 finished the session down 0.23%, with most sectors and major bourses in negative territory.
• It was a busy day for earnings in Europe with Societe Generale, Maersk and Adyen all reporting their results.
• German Chancellor Angela Merkel is set to announce that Germany will extend its coronavirus lockdown until March 14.

European stocks closed lower Wednesday as traders digest a slew of new corporate earnings.

The pan-European Stoxx 600 finished the session down 0.23%, with most sectors and major bourses in negative territory.

European stocks followed a cautious trend seen elsewhere overnight. U.S. stocks wiped out earlier gains and traded in the red on Wednesday as investors rotated out of major technology stocks. That was despite better-than-expected earnings from Twitter, Lyft, Cisco Systems, Mattel and Yelp.

Meanwhile, investors are also monitoring process on a Covid-19 stimulus package stateside. House Democrats on Monday unveiled the details of a relief proposal that included $1,400 direct checks with faster phase-outs than previous bills.

Back in Europe, German Chancellor Angela Merkel is set to announce that Germany will extend its lockdown until March 14 amid concerns over new strains of the coronavirus.

Earnings in focus

It's a busy day for earnings in Europe with Air Liquide, Metro, Thyssenkrupp, Siemens Energy, Heineken and Equinor all reporting their results.

Societe Generale also reported early Wednesday morning, posting a net profit of 470 million euros ($570 million) for the fourth quarter of 2020. The French lender's shares climbed 2.9% by mid-afternoon.

At the top of the Stoxx 600, Dutch payment processing firm Adyen climbed 8.7% and hit a record high after posting annual profits that beat expectations.

Maersk shares dropped 6.8% despite posting a strong fourth-quarter profit and 2021 outlook, with analysts suggesting the Danish shipping giant's guidance was too conservative and its earnings "somewhat disappointing," according to JPMorgan.

At the bottom of the European blue chip index, Belgian pharmaceutical company Galapagos tumbled 18.7% after the discontinuation of a phase three trial alongside Gilead Sciences.

Meanwhile, Ubisoft shed 7.6% Wednesday despite reporting record quarterly sales. The French video game publisher also narrowed its guidance for the full year.

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- CNBC.com contributed to this market report.