European stocks closed lower on Wednesday, with investors focused on tense negotiations between the West and Russia over the situation in Ukraine.
The pan-European FTSEurofirst 300 Index provisionally closed lower by 0.1 percent at 1,343.42 points, following on from the stellar gains of the previous session.
However, Italy's benchmark FTSE MIB closed unofficially higher by 1.5 percent, after a report from Markit indicated stronger-than-expected business activity in the country.
Overall, the euro zone's business sector logged its busiest month in over two-and-a-half years in February, outstripping earlier estimates.
(Read More: Euro zone business activity strongest in 32 months)
Markit's euro zone Composite Purchasing Managers' Index (PMI), climbed to 53.3 in February from 52.9 the previous month, beating the flash reading of 52.7 reported at the end of February. The boost in a business activity was once again led by Germany, which posted a 33-month high in output growth.
This data comes ahead of a Governing Council meeting by the European Central Bank (ECB) on Thursday with market watchers keen to pick up any signs on whether the central bank is looking for more economic stimulus in the coming months.
(Read More: ECB preview: What are Draghi's options?)
Europe, Ukraine & Russia
Russian President Vladimir Putin has appeared to back away from military action in the Ukrainian region of Crimea. Troops that had been on a training exercise near Ukraine's border returned to base and Putin stated that any force used would only be a "last resort."
European Union (EU) officials will now meet in Brussels on Thursday to discuss the situation. The Ukrainian Prime Minister will give a press briefing with European Parliamentary leaders and Russian Foreign Minister Sergei Lavrov is expected to meet with EU High Representative for Foreign Affairs and Security Policy Catherine Ashton.
Russia's MICEX Index closed Wednesday down by 0.4 percent.
Adidas shares fall
In individual stock news, shares of French supermarket Carrefour rose 4.3 percent after announcing its 2013 operating profit had risen by 5.4 percent.
Engineering turnaround specialist Melrose Industries fell 8.2 percent after saying sales growth in 2014 would not be easy to achieve, while Legal & General was also a major faller, with analysts highlighting a small miss in operational profit.
Sports retailer Adidas saw its shares close down roughly 3.2 percent as the German firm announced that weakening emerging market currencies would affect its 2014 earnings.
Meanwhile, Standard Chartered shares sunk 2.4 percent. The bank cut its bonus pool by 15 percent and predicted modest growth for 2014. Profit missed forecasts at $6.95 billion, against estimates of $7.1 billion.
Follow us on Twitter: @CNBCWorld