The pan-European STOXX 600 index rose as much as 0.4pc earlier in the day, spurred by signs overnight of progress between Washington and Beijing in resolving their trade dispute that has roiled markets for the past year.

However, White house adviser Larry Kudlow said on Thursday no specific agreements had been made ahead of talks between US President Donald Trump and his Chinese counterpart Xi Jinping this weekend and Washington was still insisting on structural changes on intellectual property and enforcement mechanisms.

Another Trump administration official also told Reuters that lifting sanctions on Chinese telecom equipment maker Huawei Technologies seemed unlikely.

Analysts warned against excessive optimism.

"China is unlikely to make more concessions than they have already made and certainly they will not make the type of concessions that Trump is expecting and eventually the trade war will resume," said Simona Gambarini, a markets economist at Capital Economics in London said before the White House comments.

Losses were led by the real estate and energy  sectors, down 1.1pc and 0.8pc respectively.

While most major country indexes in the region closed flat to lower, Germany's trade-sensitive DAX outperformed, up 0.2pc, boosted by Bayer's 8.7pc rally.

Bayer surged after the group hired a lawyer and formed a committee to address glyphosate litigation, and as activist shareholder Elliott Associates said it had built up a 1.1 billion euros stake in the company and considered the stock undervalued.

The biggest gainer on the STOXX 600 index was H&M, up 13.7pc after the Swedish fashion retailer said sales of its summer collections had gotten off to a good start and that it was selling more clothes at full price.

Its upbeat tone drove a 2.2pc rise in the retail sector.

On the flip side, Chr Hansen tumbled 13.8pc after the Danish food ingredients maker cut its revenue outlook for the year, hit by a disappointing performance at its food colouring and animal health businesses in the latest quarter.