Europe open: Investors cautious ahead of US jobs, Trump China talks

As of GMT, the benchmark Stoxx 600 was down 0.62% to 377.75, alongside a 0.77% slide in Germany's Dax to 12,123.68 and a 0.57% fall in the Cac-40 which was trading at 5,061.63.

Even soothing words from European Central Bank president Mario Draghi on inflation failed to inspire investors.

Speaking in Frankfurt, Draghi told an audience it was "too soon to declare success on inflation", adding that there was scant evidence inflation was headed towards the ECB's goal in a sustained manner.

Yet for all his reassurances, investors were focused instead on the overnight fall in stocks on Wall Street as the minutes of the Federal Reserve's policy meeting revealed the central bank had already discussed allowing its balance sheet to shrink later in 2017 - which means further policy tightening - at length and sooner than some believed.

"Markets had been embracing the prospect of further Fed rate hikes this year, assuming these would be accompanied - even driven - by Trump stimulus policy driving stateside economic growth," said said Mike Van Dulken and Henry Croft at Accendo Markets.

"The idea of the Fed also beginning to cease re-investment of maturing paper, slowly shrinking its asset pile, at the same time as markets question the validity of the ‘Trump trade’ and deal with plentiful geopolitical risk, has served to spark risk aversion just hours before Trump’s most crucial summit so far."

Analysts said Trump's meeting with President Xi was about undoing some of the "wrong signals" sent by the previous administration and trying to foster a more constructive relationship against the backdrop of tensions with North Korea.

Scott Kennedy at the Center for Strategic and International Studies said China itself had in the past demanded a "new type of great power relations".

"That phrase does not mean the simple acceptance of constructive relations, rather it implies that the United States does not challenge any of China’s “core interests” (most importantly, the Communist Party’s monopoly on power and China’s territorial integrity)," Kennedy said.

On the European economic front, German factory orders popped higher by 3.4% month-on-month in February following a 6.8% drop in January (consensus: 4.0%).

On the economic calendar for Thursday are German harmonised CPI data for March at 1300 GMT, followed by US weekly unemployment claims at 1330 GMTr and speeches from three Federal Reserve officials throughout the afternoon.

Financials stocks dominated early corporate news after a Reuters report that the Qatar Investment Authority's sale of a 2.25% stake in Santander Brazil was priced well below analysts' expectations.

French and German insurers were on the backfoot after it emerged that European regulators would lower the interest rate they use to calculate their liabilities, which may entail higher capital requirements for some of them.