Europe close:Stocks slip on ongoing trade concerns

A bounce in European stocks petered out after a top Chinese official warned of the growing risks the international order was facing from populism and as crude oil futures retreated on talk of a still strong outlook for US shale oil.

Speaking at the World Economic Forum in Davos, Chinese vice president, Wang Qishan, argued against "unilateralism, protectionism and populism", in what some observers took as a thinly veiled swipe at Washington, in particular.

Investors were also keeping a nervous eye on the possibility that the US Congress might be making headway in putting paid to the ongoing partial federal government shutdown in the States.

Against that backdrop, by the end of the session the benchmark Stoxx 600 had slipped by 0.06% or 0.20 points to 354.89, alongside a dip of 0.15% or 7.15 points to 4,840.38 for the Cac-40, while the German Dax had reversed course to trade lower by 0.17% or 18.57 points at 11,071.54.

In parallel, Sterling was trading on the front foot against the single currency, adding 0.64% to 1.1475, after the shadow chancellor, John McDonnell, told the BBC overnight that his party might support a cross party amendment to extend Article 50 if the government was unable to garner sufficient support for its plans.

To take note of, in the run-up to the European Central Bank's policy meeting the next day, German Chancellor, Angela Merkel, argued in favour of a prompt return of "normal" monetary policy.

Also speaking from Davos, Merkel said: "Things should return to normal as soon as possible."

She also argued in favour of a more assertive euro area, saying: "of course that raises the question of how we in the euro area can become dominant enough that we can also weigh in with our economic strength. If you don’t do this on your own, then you'll be in a certain way - I don't want to be extreme about it - controllable."

Elsewhere on the economic front, INSEE's French business climate indicator was unchanged in January from the month before at 103.0.

In another positive development, the European Commission's 'flash' euro area consumer confidence index for January improved from a reading of -8.3 for December to -7.9 in January.