MILAN (Reuters) - A two-day recovery in European shares lost steam on Tuesday as the lack of progress in U.S.-China trade talks and political noise in Italy kept investors cautious.
While strength among tech stocks on the back of a record close for the Nasdaq overnight helped limit losses, financials were a drag with shares in RBS (L:RBS) falling more than 3 percent after the government further cut its stake in the British bank.
The pan-European STOXX 600 index fell 0.1 percent by 0721 GMT, while the UK's FTSE (FTSE) fell 0.2 percent and Germany's DAX was flat.
An upgrade from Morgan Stanley (NYSE:MS) helped lift Italian oil services firm Saipem (MI:SPMI), up 3.4 percent to lead gainers on the STOXX 600.
Among tech stocks, Dutch chipmaker supplier ASM International (AS:ASMI) rose 2.69 percent, boosted by an upbeat note from Credit Suisse (SIX:CSGN). The tech index (SX8P) was up 0.3 percent, hovering around its highest levels in 17 years.