Telecoms <.SXKP> stocks fell the most, 0.7 percent, weighed down by a 2.2 percent drop in Telenor after the Norwegian telecoms operator posted second-quarter results that lagged forecasts.

Their losses and broader weakness among tech stocks <.SX8P>, down 0.4 percent, came after U.S. giant Netflix missed forecasts for growth in subscribers. The declines were offset by strength in banks and a rebound in mining stocks.

The pan-European STOXX 600 index was up 0.10.2 percent by 0814 GMT. Trading was expected to remain subdued before Powell testifies, at 1400 GMT.

"It will be interesting to hear ... whether he shares (Minneapolis Fed President) Neel Kashkari’s opinion that the U.S. economy may fall into a recession if short-term yields rise above the long-dated ones, indicating that the Fed needs to slow down the pace of tightening policy," said FXTM Strategist Hussein Sayed.

"However, trade tensions and fiscal policy are the two critical topics," he added.

Husqvarna fell the most on the STOXX, 17 percent, after the world's biggest maker of outdoor power tools posted an unexpected drop in operating profit. Its CEO told Reuters that it expected a negative effect from tariffs in 2018 and a bigger impact in 2019.

Banks, buoyed in the previous session by better-than-expected earnings from Deutsche Bank, rose for a second day. SEB gained 5.7 percent after net interest income at the Swedish bank beat forecasts thanks to strong corporate demand.

Positive updates also lifted shares in French supermarket retailer Casino, Norwegian media group Schibsted and Swedish medical technology group Getinge, which rose 3.5 percent, 12 percent and 10 percent respectively.

Thyssenkrupp jumped 6.9 percent after Chairman Ulrich Lehner quit, raising hopes of a restructuring at the German conglomerate.

"A sharply worded resignation announcement from Dr. Lehner makes clear that aggressive restructuring may be in the cards, supporting our 33 euros sum of the parts based price target," Jefferies analyst Seth Rosenfeld said.

Elsewhere, dealmaking activity drove share price moves.

Swedish telecom operator Telia fell 2 percent after agreeing to buy TDC's Norwegian business. Italian TV group Mediaset added 4 percent after it made a joint bid for tower company EI Towers.

EI Towers soared 15 percent.

(Reporting by Danilo Masoni, editing by Larry King)

By Danilo Masoni