By Emily Horton
All major European indexes fell Thursday, but were off their worst levels after weak economic data from China and the latest breakdown in talks over the U.S. government shutdown combined to spook investors.
Mining stocks were struggling, but it was a better story for the U.K.'s big retailers as Christmas sales announcements continued to roll in.
What did markets do?
The Stoxx Europe 600 fell by 0.1% to 347.26, after finishing up 0.5% on Wednesday.
France's CAC 40 was the biggest regional loser on Thursday, dropping by 0.5% to 4,789.49. The German Dax 30 lost 0.1% to 10,880.12, while the U.K.'s FTSE 100 was flat at 6,902.49.
Italy's FTSE MIB Italy index lost 0.1% to 19,156.58.
The euro slid to $1.1535 from $1.1545 late in New York on Wednesday, while the pound dropped to $1.2758 from $1.2788.
What is driving the markets?
Consumer and producer prices decelerated sharply in China last month, compounding the challenge for Beijing to boost sluggish demand in a deepening economic downturn. This replaced earlier investor optimism created by the progress being made in trade talks between Washington and Beijing.
Another worry for investors is the partial U.S. government shutdown, with the stalemate entrenched after President Donald Trump walked out of his latest meeting with Democrats on Wednesday .
In France, industrial production unexpectedly fell in November -- flashing another a warning sign from one of the world's major economies. Production fell 1.3% in November, French statistics agency Insee said Thursday, well short of analysts' expectations of an increase of 0.1%.
In the U.K., an alliance of MPs came together on Wednesday to force key amendments for the preparation of a possible 'no deal' Brexit from the European Union . The amendments require Prime Minister Theresa May to produce a plan B for Brexit within three days if she loses the crucial Jan. 15 parliamentary vote on her proposed exit deal.
What stocks are active?
Miners were under pressure on Thursday, with BHP Grou losing nearly 6% and Glencore down 0.5%.
German manufacturer Osram Licht was one of the biggest losers on the Stoxx Europe 600, falling by nearly 6%, a day after the Federal Statistical Office announced poor export figures for November .
Tesco gained 0.9% after it announced upbeat Christmas sales results on Thursday. Supermarket J Sainsbury also added 2%.