LONDON: European stock markets wobbled Wednesday before a US Federal Reserve interest rate decision, as investors digested slowing eurozone growth data and the latest earnings after the previous day's dramatic slump.

Traders forecast the Fed to deliver its first rate cut in ten years later Wednesday, despite data pointing to strong consumer confidence and rising home sales.

"Global equities in general (are) trading a little tentatively ahead of this evening's eagerly anticipated Fed rate decision," said XTB analyst David Cheetham.

"The US central bank (is) expected to cut rates for the first time in a decade, but given the high expectations amongst market participants there is plenty of scope to disappoint."

The British pound meanwhile regained composure against the euro and dollar, having plumbed two-year lows this week on heightened no-deal Brexit fears.

London's stock market petered 0.4 percent lower, with Lloyds bank shedding almost five percent on news of sliding first-half profits.

Frankfurt dipped 0.1 percent and Paris turned flat as official data showed that eurozone economic growth slowed to 0.2 percent in the second quarter, down from 0.4 percent in the previous three months.

One bright spot in Paris however was Air France-KLM, whose shares soared seven percent as second-quarter profits climbed in a challenging sector.

And Airbus stock added 0.5 percent as the European aerospace giant reported profits more than doubled in the first half.

European equities had slumped Tuesday on underwhelming corporate results and sour economic data.

- Bruising trade war -

Elsewhere, Asia equities flagged as the latest round of US-China talks on their bruising yearlong trade war came to an end in Shanghai.

Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin finished two-day talks with their counterparts in China's financial capital on Wednesday.

The talks were relatively brief and the Washington delegation left for the airport earlier than expected without speaking to reporters.

Expectations began low and took a further hit after US President Donald Trump launched an attack on Beijing's negotiators which also rocked Wall Street traders on Tuesday.

"My team is negotiating with them now, but they always change the deal in the end to their benefit," Trump tweeted.

Analysts said Trump's remarks did little to ease the already tense relationship between Washington and Beijing.

In other signs of fallout from the trade row, China saw its third straight month of contraction in manufacturing, despite Beijing's efforts to shore up the sector.

The Purchasing Managers' Index (PMI), a gauge of Chinese factory conditions, came in at 49.7 for the month, slightly above Bloomberg forecasts but below the 50.0 mark denoting growth.

Global sentiment won a limited boost after Apple on Tuesday delivered stronger-than-expected results in the just-ended quarter as growth from services helped offset weak iPhone sales. —AFP