In a week also packed with other global political and economic events such as an election in Britain and U.S. and European central bank meetings, the pan-regional STOXX 600 index closed down 0.3%, recovering from a fall of up to 1.2% earlier in the day.

The Wall Street Journal reported officials from both the United States and China as saying the groundwork was being laid to push back a Dec. 15 deadline for new tariffs.

"The fact that the deadline might be postponed can be seen as a positive, but equally it does not resolve the situation," said Simona Gambarini, markets economist at Capital Economics.

"It's fair to say that everyone expects some sort of a phase one (interim) deal ... With so much positive news already priced in, there is much bigger risk of downside if those expectations are disappointed."

Signs of progress in Sino-U.S. trade relations were a major catalyst in powering the benchmark index to four-year peaks last month. However, growing fears about delays to a deal have hurt market sentiment, with the STOXX 600 now about 2% below those levels.

Frankfurt's trade-sensitive DAX fell 0.3%, while export-reliant mining and autos sectors shed around half a percent each.

A 7.4% slide in French car parts maker Valeo after its mid-term targets disappointed investors led losses in the auto sector.

Consumer stocks, including some food and beverage <.SX3P> makers, and financials <.SX7P> were among other big decliners.

Defensive plays such as real estate <.SX86P>, utilities <.SX6P> and healthcare stocks gained. Sanofi posted its best day in three years after the firm revamped its margin goals and announced a narrower drug focus.

Sanofi rally helped overcome losses on the French index, while a rally in utility shares helped Italian stocks outperform, up 0.7%.

London's FTSE 100 fell 0.3%. Opinion polls have put the ruling Conservatives on course for a parliamentary majority in an election on Thursday, enabling Brexit to go ahead by the end of January.

Ashtead Plc's 6.2% slide was the biggest on the index after the equipment rental giant said it was suffering from competitive pressure and market uncertainty in Britain.

By Susan Mathew and Medha Singh