The STOXX 600 index fell 0.4% by 0727 GMT with losses led by Germany's DAX, which is sensitive to tariff and China-related news.

The U.S. Commerce Department said it was adding Huawei Technologies Co Ltd and 70 affiliates to its Entity List, which bans the company from acquiring components and technology from U.S. firms without government approval.

News on Wednesday that U.S. President Donald Trump was planning to delay the imposition of tariffs on imported cars and parts helped European markets swing higher late in the session.

But European automakers and their suppliers retreated again on Thursday.

Deal-making and earnings reports provided a second focal point for regional investors.

Thyssenkrupp was the top STOXX 600 performer after Reuters reported that Finland's Kone might bid for the German conglomerate's 14 billion euro ($15.7 billion) elevators division. Kone shares jumped 5%.

Nestle SA said it had entered exclusive talks to sell its skin health business to a consortium led by private equity firm EQT Partners in a deal worth 10.2 billion Swiss francs ($10.12 billion). Its shares were trading flat.

Britain's Burberry dropped 4% after reporting broadly flat full-year revenue and profit and said it expected similar this year. Its results knocked down its Paris-listed peers including LVMH, Hermes and Kering  between 0.5% and 1%.

Britain's CYBG Plc, owner of Clydesdale and Yorkshire Bank, dropped more than 3%, a day after its results showed it swung to a profit in the first half of the year.

Thomas Cook's shares tumbled about 20% after the travel group said economic and political uncertainty would impact its profits this summer after it posted an increase in losses.

Basic material stocks rose after Shanghai aluminium futures prices hit their highest since October 2018 after a refinery shutdown in China.