Europe close: Stocks in holding pattern as trade talks resume across the Pond

Stocks across the Continent managed to finish off their session lows, evem as investors tried to gauge the likely extent of the ongoing economic slowdown and waited for fresh headlines out of the trade talks between the US and China, which were again getting underway in Washington DC.

Markets were also digesting the most recent evidence of the toll which global uncertainty was taking, be it in the form of HSBC's latest quarterly financials or in euro area balance of payments data for December, which Claus Vistesen at Pantheon Macroeconomics described as a "bloodbath".

Echoing those data points, analysts at Unicredit Research said their propietary lead indicator for global trade slipped to a reading of -0.8 for January, its weakest print in over seven years.

"Global markets are in the red today, with fading hopes of an impending breakthrough between the US and China putting off bulls in a day devoid of optimism," IG's Josh Mahony said.

By the end of trading, the benchmark Stoxx 60 had dropped 0.22% to 368.97, alongside a fall of 0.50% to 20,228.19 on the FTSE Mibtel, although the German Dax managed to eke out an advance of 0.09% to 11,309.21.

Spain's Ibex 35 was also lower, retreating by 0.21% to 9,136.40.

Shares of banks paced losses, with the corresponding Stoxx 600 sector gauge down by 0.91% at 140.85.

Also weighing on sentiment perhaps, in remarks to Boersen Zeitung overnight, European Central Bank chief economist, Peter Praet, said that: "If the euro-area economy were to slow more sharply, we could adapt our forward guidance on interest rates and this could be complemented by other measures."

However, whether or not the ECB's Governing Council would open the door to such a move as soon as at its next meeting, on 7 March, was not yet clear "at this stage", Praet added.

Meanwhile, in Spain, according to daily La Vanguardia, the country's government would make a last minute push to overturn various aspects of the prior administration's labour market reforms, which were widely credited for boosting Spain's economic growth and helping to lift it out of the financial crisis.

According to La Vanguardia, the government wanted to at least make the attempt given the potential electoral value of such a move ahead of the presidential and regional elections slated for 28 April and 26 May, respectively.

There was also some concern that the back-to-back elections might to lead to some 'contamination' from the former to the latter.

However, in remarks to the state controlled broadcaster TVE-1, the day before, a political analyst from Madrid's public Complutense University, was dismissive of such concerns, insisting that the government's underlying motives were exactly the opposite.

Elsewhere on the economic front, ECB data revealed that the euro area's current account surplus registered another sharp drop in December to reach €16bn, after an upwardly revised reading of €23bn for the prior month (Preliminary: €20.3bn).

Meanwhile, figures for the Eurozone's financial account revealed a "bloodbath" according to Pantheon Macroeconomics's Claus Vistesen, as foreign investors yanked back on their direct investments and euro area residents cashed in on foreign stocks and cut the pace at which they purchased foreign fixed income instruments.

In parallel, Eurostat reported a 0.4% dip in euro area construction output for the month of December.

The ZEW Institute's economic sentiment index rose by 1.6 points to -13.4 (consensus: -14.0), but a sub-index linked to financial market experts' view of the present state-of-play dropped by 12.6 points to 15.0. February's reading was also well below the gauge's long-term average value of 22.4 and a rapid bounce-back was not on the cards, according to the ZEW President Achim Wambach.

On the corporate side of thinigs, Reuters reported that US activist hedge fund manager, Elliot Singer, had taken a 6.1% stake in Dutch outfit Intertrust.