European shares cling onto October highs as Sino-US trade talks progress

European shares edged down slightly on Tuesday at the open but clung to highs not seen since October as optimism about Sino/U.S. trade talks helped maintain morale despite a few earnings disappointments such as HSBC's and BHP Group's.

At 0829 GMT, the STOXX 600 was down 0.2 percent with most European bourses close to flat. A new round of talks between the U.S. and China to resolve their trade war will take place in Washington on Tuesday. Among the stocks in the red and pulling indexes down was HSBC, which reported a disappointing annual profit as higher costs and a stocks rout chipped away at its trading businesses. Bank of America Merrill Lynch downgraded its rating for the stock to 'neutral' following the release of its results, saying there is "limited upside" for the share price.

The banking sector fell 0.8 percent. The session's top gainer was Germany's Wirecard, up 7.7 percent. On Monday, Germany's financial watchdog banned "short" selling of the stock due to volatility following reports in the Financial Times which are now the subject of an investigation by German authorities. Still in Germany, HeidelbergCement jumped 4.4 percent as it shrugged off concerns about trade wars and a disorderly Brexit to forecast higher demand for cement this year. 

(With inputs from agencies.)