European stocks mostly lower in holiday-thinned trade; UK's FTSE up 0.8%

LONDON – European stocks were mostly lower Wednesday as holiday-thinned trading continued in the region.

The pan-European Euro Stoxx 600 index was down 0.1% late-afternoon after a higher open. British and Irish markets reopened after the Christmas holiday period, and the FTSE 100 was up 0.8%, playing catchup with other indexes in the region.

Global investors are looking for a Santa Claus rally to close out a year in which the S&P 500 has rallied more than 29%. The benchmark index historically gains during the Santa Claus rally — the final five trading days of the current year and the first two of the new year. The period began Monday.

U.S. stocks were higher for the most part, following a mixed session on Tuesday. Market players have spent recent weeks juggling concerns over new Covid restrictions and tighter central bank policy with early studies suggesting omicron strain of the virus is milder than previous variants like delta. New studies in South Africa and the U.K. last week suggested omicron has a reduced risk of hospitalization and severe illness.

In the U.K. at the start of this week, infections were still topping 100,000, while France has also reported cases above that figure for the first time. France reported a record high of 179,807 new coronavirus cases on Tuesday.

John Bell, the U.K. government's life sciences advisor, said Tuesday that omicron "is not the same disease as we were seeing a year ago," helping to soothe fears slightly over the new variant.

In individual stocks news, it was the media, mining and retail sectors that were notably higher. S4 Capital, Glencore and Howden Joinery were just some of the U.K. stocks at the top of the Euro Stoxx 600.

- CNBC's Ryan Browne contributed to this report