"Even with the Chinese data dump that greeted the European markets at Monday's open, the session turned out to be a bit of a snooze, lacking an injection of energy from the US," Connor Campbell, an analyst at Spreadex, said. German chemicals firm Henkel was the biggest STOXX 600 faller, down about 10 percent, after the maker of Schwarzkopf shampoo and Persil detergent warned earnings would fall this year as it steps up investment in brands and digital technology to try to revive growth.
Fourth quarter earnings such as Henkel are beginning to flow in but some analysts expect stocks to react positively overall as sharp recent selloffs had sunk valuations.
"I am not too pessimistic," said Christian Stocker, lead equity strategist at UniCredit in Munich. "We saw very negative earnings revisions in Q4 and now the expectations are very, very low."
Stocker expects fourth-quarter earnings to grow 5 percent year-on-year, and sees potential in the first quarter for the EuroSTOXX 50 to rise to around 3,250 points, for the DAX around 11,500 and for the FTSE MIB to 20,200.
"As long as we have low but positive earnings growth I think we have a solid basis for the equity market," he added.
Shares in online classifieds firm Scout24 climbed 2.1 percent after it rejected a 4.7 billion euro ($5.4 billion)takeover offer from private equity firms Hellman & Friedman and Blackstone, potentially paving the way for a bidding war.
"We think Scout was right to reject the offer," Liberum analysts said, adding that the bid valued the firm at just more than 14 times adjusted EBITDA, below the 19 times Silver Lake paid for ZPG last year.
"We would expect other bidders to now emerge for the asset."
Elsewhere, broker notes moved some stocks: Air France
shares rose 5.2 percent after Davy Research upgraded the airline to outperform, while Fraport gained 3.1 percent after Goldman Sachs raised it to neutral from sell. Deutsche Telekom fell 2.4 percent after Berenberg cut the stock to a "sell", and Pandora slid 1.45 percent after Citi cut it to "neutral" from "buy".