(Reuters) - European stocks bounced back on Wednesday after their worst sell-off this year as optimism about a strong earnings season countered worries about a rapid rise in COVID-19 cases in some countries. The pan-European STOXX 600 index rose 0.7% after a blistering seven-week rally ran into a bout of profit-taking on Tuesday, when it fell 1.9%. Healthcare stocks gave the STOXX 600 its biggest boost, with Swiss drugmaker Roche jumping 3% after predicting a surge in demand for its drugs for the remainder of 2021. Semiconductor equipment maker ASML jumped 4.1% to lift tech stocks after it raised its full-year sales forecast, citing strong demand amid a global computer chip shortage. Smaller rival ASM International rose 1.2% on forecasting a rise in second-quarter orders. European company earnings are expected to rise a record 61% in the first quarter of 2021, based on Refinitiv IBES data, placing Europe on course for a rare outperformance versus corporate America. “(But, markets) remains all-too-aware that earnings season provides the potential for some more downside as companies find themselves struggling to spin a positive case to justify further appreciation in their stock prices,” said Chris Beauchamp, chief market analyst at IG. With global equities trading at all-time highs and earnings expectations surging as vaccination drives and stimulus programmes support global recovery, concerns about stretched valuations remain. On Wednesday, the European Union crossed one its last major hurdles to launch a 750 billion euro ($900 billion) recovery fund. But, other risks such as inflation and a stock market correction are starting to become more dominant than the pandemic, a top official at Norway’s $1.3 trillion wealth fund said. German fashion house Hugo Boss jumped 6.7% to a one-year high, with traders citing a media report of takeover interest in the company, including from French luxury goods maker LVMH. The world’s second-largest brewer Heineken NV and French luxury goods group Kering were among other stocks to rally after upbeat results. Among decliners, Italian football club Juventus slumped 13.7% after breakaway European Super League founder and Juventus chairman Andrea Agnelli said the league can no longer go ahead after six English clubs withdrew. On Thursday, the European Central Bank’s meets but no policy changes are expected to be made.