European Markets Mixed in Choppy Trade

European shares were trading lower in choppy trade on Wednesday, with traders citing window dressing and investors adjusting positions as the strongest first quarter in 14 years draws to a close.

The pan-European FTSEurofirst 300 was off 2.86 points, or 0.3 percent, at 1,080.68 by 0858 GMT, having shed 0.5 percent in the previous session in the aftermath of Monday's 0.9 percent bounce.

Fund managers said the FTSEurofirst index, which has jumped about 8 percent in the year to date, and is on track to record its best first-quarter performance since 1998, could struggle for near-term direction.

"The performance of equity markets has been phenomenal this quarter, which makes me believe that upside will be limited in the next few days," Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million of assets, said.

Defensive pharmaceutical stocks advanced, helping to limit the index's falls on Wednesday, as investors moved back into the sector which missed out on the second part of the winter rally.

Whilst markets drew comfort from speculation of further Federal Reserve monetary easing, jitters over Spain's finances returned as its government gets set to unveil its budget later in the week.

Spain is believed to have already entered its second recession in three years and Prime Minister Mariano Rajoy has pledged to meet a deficit target of 5.3 percent of gross domestic product in 2012 following a one-month spat with the European Commission.

Spain's IBEX shed 0.4 percent.

"Fundamentally there are still unanswered questions about some of these European countries. Unless we hear a guaranteed QE3 from Bernanke, (the market) might be a little bit choppy for the next week or so," Mark Priest, trader at ETX Capital, said.

Oil major Total was among the biggest fallers across Europe, off 2.6 percent, adding to a 6 percent slump seen on Tuesday when it warned it could take six months to halt the flow of a gas leak at its Elgin platform in the North Sea.

The stock broke below its 200-day moving average in early trade, sending a strong bearish technical signal.

"People still have in mind the BP saga. We don't know how this one will turn out, so it's better to get out of this stock now, or go 'short' if you're adventurous," a Paris-based trader said.

Total's shares are in the crosshairs of short sellers, featuring among the most shorted stocks across Europe, according to Data Explorers.