European shares fell on Wednesday after a rebound the day before as a softer tone from US President Donald Trump calmed investor worries over worsening trade relations between China and the US.
The pan-European STOXX 600 index fell 0.4 per cent by 0743 GMT. Bank-heavy Italian and Spanish indices led the losses after some dour results from their lenders.
On Tuesday, Trump called the trade dispute with China “a little squabble” and expressed optimism about reaching a deal. His comments helped markets recover from two-months lows after both sides imposed duties on each other's imports.
Asian shares also found support as weak retail sales and industrial output data from China raised hopes for more stimulus from Beijing.
Germany's DAX the most sensitive European market to trade-war fears - dropped 0.4 per cent, even though the latest data showed Europe's biggest economy returning to growth in the first quarter of 2019.
Autos, which were among the leading gainers on Tuesday, dropped 1.3 per cent. Renault's shares fell about 3 per cent after its Japanese partner, Nissan, issued a bleak earnings outlook. Volkswagen also fell about 3 per cent.
Banks fell 0.9 per cent, weighed down by disappointing results. Raiffeisen Bank International (RBI) and Dutch bank ABN Amro both missed profit expectations. French bank Credit Agricole's first-quarter net profits dropped after two one-off events offset gains in profitability at some of its businesses.
Bucking the trend was British bank CYBG Plc, which jumped 6 per cent to the top of STOXX 600 after posting a first-half profit.
LafargeHolcim's stock rose 1.3 per cent as the world's largest cement maker posted a rise in operating profit. The IT services provider Cancom SE gained after confirming its full-year outlook.
STMicroelectronics rose after Kepler Cheuvreux raised its price target. German publisher Axel Springer gained after JP Morgan upgraded its shares to “overweight” from “neutral”.
A more than 5 per cent drop in E.ON weighed on the energy company's shares and the utilities sector as Goldman Sachs downgraded its shares. Its shares also traded ex-divided.