Europe close: Stocks bide their time ahead of Fed's Powell, G-20

Stocks on the Continent finished the session little changed as investors waited on a key speech from the head of the US central bank scheduled for after the close of stockmarkets.

Commenting on the mood in markets: IG's Chris Beauchamp said: "Markets are mixed ahead of a speech by Jerome Powell, where the chairman of the Federal Reserve may well look to follow comments made by his deputy earlier in the week and hint that the US central bank might reassess parts of its current monetary policy stance.

"For a central bank, the shift from 'long way from neutral' to 'nearly neutral' is a dramatic move in language in a short space of time, and probably reflects a combination of factors, not least being White House criticism and the plunge in oil prices. While it is not clear what Mr Powell might say to encourage equity investors, it will be interesting to see if he can send the right signal for dip buyers while also avoiding the implication that a significant deterioration in economic performance is round the corner."

By the end of trading, the benchmark Stoxx 600 was virtually flat at 357.39, alongside a dip of 0.09% or 10.23 points on the German Dax to 11,298.88, while the FTSE Mibtel was off by 10.8% or 35.22 points at 19,115.16.

Markets were also keeping an eye on the headlines around the upcoming G-20 meetings in Buenos Aires, where the leaders of China and the US were set to meet to talk about trade.

Linked to the above, overnight China's ambassador to the US, Cui Tinkai, warned of the potential dire consequences from trade protectionism, pointing to the historical antecedents to back-up his case.

"In the last century, we had two world wars, and in between them, the Great Depression. I don’t think anybody should really try to have a repetition of history."

Nevertheless, he added that: "We believe that the key to a negotiated solution to the trade issues is a balanced approach to the concerns of both sides and honestly so far I have not seen sufficient response from the US side to our concerns."

In response, analysts at Rabobank told clients: "The level of disconnect here is stunning. Besides the economic power mismatch, what exactly does China want the US to give it, besides removing tariffs that are the only method so far shown to produce any change in its behaviour?"

Wednesday's economic reports were also mixed.

According to the European Central Bank, the rate of growth in the Eurozone's money supply picked-up from September's 3.5% pace to 3.9% in October (consensus: 3.6%).

However, as Pantheon Macroeconomics's Claus Vistesen pointed out, the rate of growth in M1 was unchanged at 6.8% and that of credit to the private sector at 3.0%.

Meanwhile, consultancy GfK's consumer confidence index for Germany weakened from a reading of 10.6 for November to 10.4 in December (consensus: 10.5).