European stocks ended lower for the third straight session on Thursday but well off the day's lows as strong gains on Wall Street sparked a late recovery, eclipsing fears of more asset writedowns in the banking sector.
The FTSEurofirst 300 index of top European shares unofficially closed 0.4 percent lower, at 1,303.38 points, after falling as low as 1,286.14.
"The market is hanging on as a number of stocks that were slaughtered are now recovering. Is it a new upward trend? We're not quite sure at this point," said Valerie Plagnol, chief strategist at CM-CIC Securities, in Paris.
Stocks did not react much to interest rate decisions by both the Bank of England and the European Central Bank, which came in as expected.
The ECB held interest rates at 4.0 percent and President Jean-Claude Trichet, while insisting on the need to continue to fight inflation, warned that financial market tensions could last longer and hurt the euro zone economy more than expected.
The BoE cut interest rates for the third time in five months, by a quarter percentage point to 5.0 percent.