LONDON: European stock markets were subdued on Wednesday, as investors tracked news from Ukraine, shrugging off gains in Asia and eurozone bond yields that hit another record low, dealers said.
European stock markets ended mixed, with Frankfurt's main DAX index falling 0.19 percent to 9,569.71 points.
London's benchmark FTSE 100 gained 0.12 percent, ending on 6,830.66 points, while in Paris the CAC 40 climbed 0.04 percent to 4,395.26 points as investors digested the formation of a new French government.
"Traders are sitting on their hands as they await further developments from the Ukrainian situation," said analyst David Madden at trading firm IG.
"Reports suggest that relations between Kiev and Moscow are improving but traders are not rushing out to buy stocks just yet."
Eurozone bond yields fell to new record low levels, pushed down by a belief that the European Central Bank may adopt quantitative easing to inject funds into the economy and ward off deflation.
Meanwhile, analysts welcomed the surprise appointment in a new government in France of former investment banker Emmanuel Macron as economy minister, as a signal that President Francois Hollande is determined to enact deadlocked economic reforms.
Strategists at French brokers Credit Mutuel-CIC said markets would continue to give France the benefit of the doubt on its ability to enact reform, but warned that France remained on "a razor's edge".
French Prime Minister Manuel Valls, in a well-received speech to French business leaders, said that the government recognised the importance of business and a strong relationship with economic powerhouse Germany, and the need for rapid progress on reforms.
Excitement over ECB cools:
Kiev said a convoy of tanks and heavy weapons from Russia was travelling towards a government-held town in restive east Ukraine.
The news came as talks between the leaders of Russia and Ukraine apparently failed to make a major breakthrough towards ending fighting in east Ukraine, after strongman President Vladimir Putin played down the entry by his troops into the former Soviet state.
On Tuesday, European stocks had jumped higher, following comments from the head of the European Central Bank last week.
"Eurozone stocks have pulled back a bit this morning as the excitement about additional easing from the ECB has cooled off, but with the next interest rate decision a little over a week away, we could be looking at another rally before the week is out," added Madden.
In foreign exchange activity on Wednesday, the European single currency rose to $1.3195 from $1.3169 late in New York on Tuesday.
The euro was unchanged from 79.60 pence late in New York on Tuesday, while the pound edged up to $1.6575 from $1.6544.
The price of gold meanwhile fell to $1,282.75 an ounce, from $1,286 on Tuesday on the London Bullion Market.
Wall Street pauses:
New York stocks traded sideways strong gains on Tuesday when the Conference Board said consumer confidence rose in August for a fourth straight month, to its strongest level since February 2008.
Durable goods orders also surged in July to a new monthly record. By early afternoon on Wall Street, the Dow Jones Industrial Average was up 0.08 percent to 17,120.02 and the tech-rich Nasdaq had edged 0.01 percent higher to 4.571.23 points.
The broad-based S&P 500 was up 0.01 percent to 2,000.23 after ending Tuesday 0.11 percent higher to 2,000.02, above the 2,000 benchmark for the first time.
"The S&P 500 traded flat early on as investors on Wall Street struggled to justify higher equity values owing to a lack of economic data releases throughout the day," said Kash Kamal, an analyst at Sucden Research.
Asian markets mostly ticked higher Wednesday following another record close on Wall Street as investors welcomed more upbeat data indicating the US economy is back on track.
Tokyo ended marginally stronger, Sydney gained 0.24 percent and Seoul added 0.33 percent.
Shanghai stocks put on 0.11 percent but Hong Kong closed 0.62 percent lower after hitting a six-year high on Monday.
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