(Reuters) - European shares struggled for direction on Wednesday as losses due to uncertainty around an interim U.S.-China trade deal were curtailed by a jump in auto stocks following merger talks between Fiat Chrysler and PSA Group.
The pan-European STOXX 600 index <.STOXX> was flat at 0810 GMT, with auto stocks <.SXAP> climbing 1.2% to their highest level in nearly six months.
Italian-American carmaker Fiat Chrysler <FCHA.MI> confirmed merger talks with French rival PSA <PEUP.PA>, a potential deal that could reshape the global auto industry and create a European powerhouse.
Shares of both companies rose between 7% and 8%, topping the benchmark STOXX 600 index.
However, concerns over the U.S.-China trade pact resurfaced after a U.S. administration official told Reuters that it might not be completed in time for the leaders of the two countries to sign in Chile next month.
Trade-sensitive tech <.SX8P> and commodity-linked stocks <.SXPP> were the biggest decliners among the major European sub-sectors.
Deutsche Bank <DBKGn.DE> fell 5% after reporting a loss for the second consecutive quarter, partly due to costs for a major restructuring.
Markets now await a raft of euro zone economic indicators that will shed light on the health of the trading bloc, along with an expected interest-rate cut at the U.S. Federal Reserve's meeting later in the day.
(Reporting by Agamoni Ghosh and Lisa Pauline Mattackal; Editing by Arun Koyyur)
