MILAN: European shares fell for a second day on Thursday as weak manufacturing data from top metals consumer China hit miners and as investors grew cautious about a possible trade deal between Washington and Beijing.
The pan-regional STOXX 600 index fell 0.4 percent by 0932 GMT, further retreating from a more than four-month high hit this week. The trade-sensitive DAX was down 0.2 percent and the commodity-heavy FTSE 100 dropped 0.8 percent.
Miners were the biggest sectoral fallers, down 2 percent, as copper prices fell after surveys showed that factory activity in China shrank for the third straight month in February. Shares in Rio Tinto and BHP fell 2.5 and 2.4 percent respectively.
Losses however were broad-based, with investors reluctant to take risks after U.S. Trade Representative Robert Lighthizer said it was too early to predict an outcome in the trade negotiations between the world's two largest economies.
"The realisation that there is still considerable work to be done for the U.S. and China to reach a trade agreement, plus further evidence of economic activity in China slowing is leaving little for traders to cheer on Thursday," said Jasper Lawler, head of research at London Capital Group.
Elsewhere, earnings updates were in focus.
AB InBev rose 5.2 percent, leading blue chip gainers in Europe, after the world's largest brewer forecast strong revenue and profit growth in 2019, with a focus on increasing beer sales rather than just prices.
"We believe the discount of 15 percent at which AB InBev is trading compared to Heineken and Carlsberg is not justified given its much higher operating profit margin and the confident outlook for 2019," said Bryan Garnier analyst Nikolaas Faes.
Among other big multinationals, cigarette maker British American Tobacco and Swiss engineer ABB fell 2.8 and 1.7 percent respectively following their earning updates.
Spain's Amadeus fell 3.5 percent after the IT services group reported revenues that fell short of market expectations, while its core profit was broadly in line.
Sunrise was the biggest faller in European markets, down 9 percent after it agreed to buy Liberty Global's Swiss unit in a 6.3 billion Swiss francs deal to create a bigger challenger to Swisscom.
In other M&A news, Vivendi rose 2.7 percent after Reuters reported that KKR and China's Tencent were exploring rival bids for up to half of its Universal Music division, a deal potentially worth up 20 billion euros.
A promising outlook from Zalando drove shares in Europe's biggest online-only fashion retailer to the top of the STOXX 600, up 18 percent.
In spite of this week's pull-back, European shares are up 10 percent so far this year as global equities have recovered from a brutal sell-off in the last three months of 2018 on worries over slowing economic and corporate growth.
Despite the recovery some investor remain cautious.
"We're carrying a bit of cash... I think things are still fragile, Q4 is still very fresh in people's memories," said Ian Ormiston, manager of the Europe ex-UK smaller companies fund at Merian Global Investors.