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London - European stocks gave up some of their recent gains on Tuesday ahead of inflation and unemployment data from the eurozone and Thursday's hotly anticipated European Central Bank meeting.
Recent economic data has pointed to a weaker-than-expected recovery for the single-currency bloc, though share prices have been supported by the prospect of fresh intervention from the ECB when it meets this week.
At 09:50, the pan-European FTSEurofirst 300 index was down 0.1%, with benchmark national indexes in Germany, France and the UK flat to 0.2% lower.
Eurozone year-on-year inflation for May is expected to remain flat at 0.7%, while unemployment for April is also seen flat at 11.8%, according to Reuters polls.
"Investors ... are focused on the decision due from the ECB on Thursday," said Daniel Larrouturou, deputy head of Paris-based asset manager Diamant Bleu Gestion, which manages €200m in assets.
"The inflation figures may give a flavour of the decision in the market's eyes."
Consumer and media stocks such as broadcaster ProSiebenSat1 , British American Tobacco and brewer Heineken were down between 1.3% and 3%.
UK building materials supplier Wolseley bucked the trend. Its shares rose 2.5% after it said it expected its revenue to grow about 4% in the next six months and posted a 5.1% rise in third-quarter like-for-like revenue, lifted by strong trading in the US and Nordic region.
Spain's benchmark IBEX index was an outperformer, up 0.3%, with Caixabank up more than 2% after Citi added the stock to its European Focus list.
"This is overall a continuation of the trend of outperformance in southern European markets," said Larrouturou. "It's indicative of what markets are expecting from the ECB."
A clutch of senior sources have told Reuters that the ECB was preparing a package of policy options for its June 5 meeting, including cuts in all its interest rates and targeted measures to boost lending to small- and mid-sized firms, which investors view as especially positive for the euro's periphery.
"Equities are likely to continue drifting higher ... Many speculate the ECB will deliver comprehensive action," IG Market Strategist Stan Shamu said in a note to clients.
