Europe close: Core and periphery stocks diverge on politics

Stocks on the Continent finished much as they had started the session, on a mixed note, with German equities boosted by positive corporate results even as political considerations weighed on Italian and Spanish issues.

Helping to prop up sentiment, two of Wall Street's main market gauges notched up record closes overnight, even as the White House announced that trade talks between the US and China were set to resume over the following week.

And despite the wary views on the outlook for markets expressed by some market watchers, the day's global headlines were awash with news of corporate deal making from around the world, whether it be already completed, in the planning stages or simple speculation.

The benchmark Stoxx 600 finished down just 0.09% at 390.98, but alongside a drop of 0.79% to 21,724.4 for the FTSE Mibtel.

Weighing on Italian shares, on Tuesday evening the country's ruling coalition scrapped plans to shift part of the city of Rome's debt onto the central government's books.

Rating agency Standard&Poor's was set to judge the country's debt rating on Friday and while analysts such as those at Rabobank were not anticipating a downgrade, prospects for Italy's credit worthiness had deteriorated since the last time around.

And with general elections looming ever closer on the horizon, on 28 April, Spain's Ibex 35 was down 0.74% to 9,456.40.

On the other hand, the German Dax added 0.63% to 12,313.16 on the back of a surge in SAP's share price, after the software giant raised its forecast for full-year profits on the back of a strong performance at its clod business.

Elsewhere on the corporate side of things, the Financial Times reported that Deutsche Bank and UBS had held "serious" talks at merging their asset management arms.

Wirecard AG was another notable gainer after Japan's Softbank pledged $1bn of investments.

But news on the economic front was less edifying.

The IFO institute's closely-followed business confidence gauge for Germany printed at 99.2 for April, down from a reading of 99.7 in March (consensus: 99.9), in part as sentiment among the country's manufacturers deteriorated.

The mood also worsened among French businessmen in manufacturing, with INSEE's confidence gauge slipping from a reading of 103 to 101, although a rival gauge for services was steady at 105.0.

In the background, top US trade negotiators would travel to Beijing at the start of the following week, with both sides aiming to have a draft deal in place by May, Bloomberg reported citing two persons familiar with the discussions.