Europe close: Stocks end mixed despite policy announcements in China

Stocks ended on a mixed note despite fresh economic stimulus announcements in China and data showing that the single currency bloc returned to growth in the second quarter.

"European markets have seen another positive session as we come to the end of a solid month of gains, with another new record high for the DAX today, while the CAC 40 has also seen a strong rebound after a sharp two day sell off just under a week ago," said Michael Hewson, chief market analyst at CMC Markets UK.

"The momentum appears to have been driven by strong gains in Chinese equity markets against a backdrop of strong indications from Chinese policymakers that they are looking at moves to boost the economy in the coming weeks."

By the end of trading, the pan-European Stoxx 600 had edged up by 0.12% to 471.35.

Germany's Dax on the other hand drifted lower by 0.14% to 16,446.83 and Spain's Ibex 35 gave back 0.45% to 9,641.50

Overnight, China's National Development and Reform Commission published a policy document that included multiple measures designed to bolster consumption, many of which had already been announced.

Separately, it was reported that authorities in Beijing and Shenzhen might ease curbs on the property sector.

Back in Europe, Destatis reported that German retail sales dropped at a month-on-month pace of 0.8% in June (consensus: 0.2%).

But prior months' data were revised up by a combined 1.5 percentage points.

Eurostat reported that euro area gross domestic product expanded at a quarter-on-quarter pace of 0.3% over the three months to June (consensus: 0.2%).

As well, European Central Bank chief, Christine Lagarde, told Le Figaro that the monetary authority could raise interest rates rise at its September meeting or keep them at their current level.

"A pause, whenever it occurs, in September or later, would not necessarily be definitive," she added.

Heineken shares dropped 8% after the brewer reduced its earnings forecast due to the weaker consumption.

That followed a 22% drop in operating profits for the first half of the year.