Europe close: Stocks end on mixed note, euro off highs

Stocks in Europe finished on a mixed note despite upbeat manufacturing sector figures out of Germany and Chinese survey data showing the quickest pace of growth since 2011.

Investors were also heartened by forecasts for a smaller economic downturn in the former, the euro area's largest economy.

"With the polls signalling a Trump comeback, and the US economic picture clearly improving, we are seeing outperformance on the other side of the Atlantic today. Nevertheless, the dollar remains a consistent underperformer as the multi-month dollar selloff looks to continue today," said IG senior market analyst Josh Mahony.

By the end of trading, the benchmark Stoxx 600 had drifted lower by 0.35% to 365.23, with the French Cac-40 off by 0.18% to 4,938.1.

The German Dax on the other hand was up 0.22% to 12,974.25.

Euro/dollar was higher throughout most of the session - breaking past 1.20 at one point - but ended the day little changed at 1.1940.

From a sector standpoint, Technology issues were the best performing group on the Stoxx 600, climbing 1.32%, together with a 1.06% advance for Basic Resources.

Lenders' shares however were down by 1.54%.

In German news, economy minister, Peter Altmaier, bumped up his forecast for 2020 GDP growth from -6.3% to -5.8%, although that meant the rebound penciled in for 2021 was no seeen reaching 4.4% instead of 5.2%.

"Overall, we can say that at least for now, we are dealing with a V-shaped development," he said.

Altmaier also dismissed any need for another full lockdown of the German economy to guard against the pandemic.

Underscoring the improved mood in the euro area's largest economy, survey compiler IHS Markit's factory sector Purchasing Managers' Index improved from a reading of 51.0 for July to 52.2 in August.

The Italian PMI revealed a similar improvement, but those for France and Spain both retreated back below the 50.0-point mark.

Headline euro area inflation on the other hand slowed from a year-on-year pace of 0.4% to -0.2% (consensus: 0.2%).