Europe's STOXX 600 ended the day down 0.46 percent, while U.S. stocks climbed higher in morning trading, boosted by news that a long-awaited tax cutting bill should face final votes in Congress before the year-end.
"The only reason for U.S. stocks to overperform today is the hope of a tax reform", said Nicolas Cheron, head of research at Binck, adding that investors were typically cautious at this time of the year before often heading into a "Christmas rally".
Central bank meetings in Frankfurt and London provided no surprises as the ECB kept its key rates on hold and held rigidly to script on its intentions for next year.
The Bank of England also stuck to its view that interest rates were likely to rise only gradually despite above-target inflation.
"Today was a busy day for central banks, but by and large the stock market reaction was muted," said David Madden, a market analyst at CMC Markets.
Bank stocks, which were already under pressure in early trading after what commentators called a "dovish rate hike" from the U.S. Federal Reserve, suffered.
Europe's banking index fell 0.6 percent as there was little to revive investors' hopes that monetary policy will be tightened sooner then indicated. Higher interest rates increase banks' profits and revenues.
"The inflation figures were not exactly inspiring," said Jerome Legras, head of research at Axiom Alternative Investments, referring to the ECB's forecast of inflation reaching only 1.7 percent -- well below its target -- in 2020.
Britains's HSBC, France's BNP Paribas and Italy's Intesa were the biggest drags to the STOXX.
Heavily weighted towards financial stocks, Italy's FTSE MIB was among the worst-performing European bourses, down 0.9 percent, failing to bounce back after heavy losses in the previous session as political worries resurfaced.
Most sectors were negative, particularly consumer staples, with Unilever losing 1.2 percent, and healthcare stocks where Glaxosmithkline fell 1.8 percent.
French technology consultancy Atos fell 2.8 percent after its offer for chipmaker Gemalto was rebuffed. Gemalto fell only 0.21 percent to 46.90 euros, above the 46 euros per share bid, showing a number of investors were betting on an improved offer.
The latest twist in South African retailer Steinhoff's accounting woes sent its German-listed shares down 13.3 percent as it said it would have to restate 2016 financial results.
Among gainers, wind turbine maker Vestas Wind jumped 7 percent, with its Spanish peer Siemens Gamesa up 3.5 percent, with a change to the U.S. tax reform package giving the sector a boost.
(Reporting by Helen Reid; Editing by Catherine Evans)
By Helen Reid and Julien Ponthus
Stocks treated in this article : AtoS SE
, Dassault Aviation
, Banco Santander
, Siemens Gamesa Renewable Energy
, Dialog Semiconductor
, Vestas Wind Systems
, Credit Suisse Group
, HSBC Holdings
, UBS Group
, Lonmin Plc