European stock markets were flat on Wednesday, subdued by dour signals from Deutsche Bank and Aston Martin as well as a slide in commodity-linked stocks, with weak euro zone manufacturing and services surveys adding to worries on the outlook for growth.
The purchasing manager (PMI) surveys showed euro zone business growth was weaker than expected in July, hampered by a deepening contraction in manufacturing, and some indicators suggested conditions will get worse next month.
France's CAC 40 erased early gains to fall 0.2pc after the data, while Germany's DAX pared gains.
"German manufacturers especially in the car industry are pretty anxious about looming tariffs which seems to be suppressing the sentiment within the sector," said Teeuwe Mevissen, senior market economist at Rabobank.
"It all depends on how things will go between US and China and the US and European Union because the manufacturing industry is very export oriented."
On the earnings front, shares in Germany's biggest bank , in the midst of sweeping changes to reboot its business, fell 3.7pc after it reported a bigger than expected loss, while those in luxury car maker Aston sank 23.2pc after it cut its annual forecast for wholesale sales.
Positive signs on US-China trade talks and the prospect of a supportive message from the European Central Bank on Thursday offset those blows, along with some positive earnings from French carmaker Peugeot and German chemicals maker Covestro AG.
By 0808 GMT, the pan-European stocks benchmark STOXX 600 was trading flat, hovering around two-week highs hit a day earlier.
Stocks have been shakier in the past fortnight after recovering strongly from falls in May that were the worst in more than two years.
While investors have dialed down forecasts for corporate earnings in the near-term, expectations that major central banks will loosen monetary policy continue to prop up sentiment.
"We view the behavior of the equity market as driven by expectations of Fed easing and a consequent recovery in the economy," Nordea strategist Sebastian Galy said in a morning note.
"We also view earnings as in a slight recession for the next two quarters, (which) the market is looking beyond ... looking at longer-term growth and whether current policies will achieve them.
Basic materials slid 1.5pc, with a fall in iron ore prices and a Credit Suisse downgrade to 'underperform' taking shares of Rio Tinto down 4pc.
That pushed London's commodity-heavy FTSE 100 0.5pc lower.
Shares of Infineon, STMicroelectronics, and Siltronic rose between 1.1pc and 2.4pc after results from Texas Instruments Inc hinted that a global slowdown in microchip demand would not be as long as feared.
Chip stocks helped the technology sector rise 0.7pc.
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