Despite some positive economic data from the region, European stocks ended on a weak note on Wednesday.
However, with stocks staging a fairly good recovery in the final hour, the downside was just marginal in the major markets.
In addition to digesting the latest batch of economic data, investors also reacted to some disappointing earnings updates from top European and U.S. companies.
Concerns about a potential U.S. recession, and geopolitical tensions weighed on sentiment.
The pan European Stoxx 600 ended 0.29% down. The U.K.'s FTSE 100, Germany's DAX and France's CAC 40 edged down 0.16%, 0.08% and 0.09%, respectively. Switzerland's SMI ended flat.
Among other markets in Europe, Belgium, Denmark, Finland, Netherlands, Norway, Poland, Portugal, Sweden and Turkiye closed weak.
Czech Republic, Iceland and Ireland ended higher, while Austria, Greece, Russia and Spain settled flat.
In the UK market, Aviva rallied 3.25%. IAG, United Utilities Group, Severn Trent, Prudential, Lloyds Banking Group, Antofagasta, GSK, Unite Group, Natwest Group and Barclays gained 1 to 2%.
Ocado Group shared ended nearly 5% down. Experian ended lower by 3.7%. Scottish Mortgage, Croda International, Fresnillo, Melrose Industries, Rentokil Initial, BT Group and Standard Chartered also ended notably lower.
In Paris, Dassault Systemes, Thales, Capgemini, Saint Gobain, Eurofins Scientific, Publicis Groupe and Kering ended with sharp to moderate losses.
Engie, Veolia, STMicroElectronics, AXA, ArcelorMittal and Sanofi posted notable gains.
In the German market, Daimler gained about 2.3%. RWE, HeidelbergCement, Infineon Technologies, Porsche and Sartorius ended higher by 1 to 1.5%.
Fresenius, Fresenius Medical Care, Adidas, Puma, Siemens Healthineers, Covestro, Deutsche Post, MTU Aero Engines and Siemens Energy lost 1 to 3%.
In economic news, UK output price inflation slowed for the fifth successive month in December, soothing fears of high inflation, and provided more justification to the Bank of England for softening its tightening policy stance.
Output price inflation unexpectedly slowed to 14.7% from 16.2% a month ago, the Office for National Statistics said.
However, economists had forecast prices to gain at a faster pace of 16.4%. Despite the slowdown, producer price inflation remained high.
Germany's business confidence improved as expected at the start of the year to the strongest level in seven months, as companies were considerably less pessimistic about expectations, survey results from the ifo Institute showed.
The business confidence index rose to 90.2 in January from 88.6 in December. That was in line with economists' forecasts.
Further, this was the highest reading since June last year, when it was 92.3.