* London's FTSE outperforms as pound falters on Brexit woes
* European banks lower as bond yields slide
* Swedish banks hit by money laundering scandal
* Sentiment tempered by disappointing U.S. GDP numbers
* U.S.-China trade talks in focus
(Updates to closing)By Susan MathewMarch 28 (Reuters) - European shares pared early gains tofinish lower on Thursday as optimism around some progress inU.S.-China trade talks were outweighed by losses in banks amid agloomy outlook for global economic growth and uncertaintiesaround Brexit.The pan-region STOXX 600 index slipped 0.1 percent,with Frankfurt's trade-sensitive index DAX giving upmost gains to close 0.08 percent lower, while Madrid andMilan slipped more than half a percent each.
The pullback intensified after data showed that economicgrowth in the United States slowed more than expected in thefourth quarter - the latest addition to a slew of poor economicdata from around the globe. The 0.6 percent rise in London's FTSE 100 was themost among regional indices, spurred by a weaker pound afterWednesday's indicative vote on Brexit ended in a deadlock. Efforts to persuade lawmakers to back British Prime MinisterTheresa May's deal continue with a parliamentary debatescheduled for Friday amid reports that it will not be aso-called 'Meaningful Vote', making the rounds."The FTSE is ahead purely because the pound is having aterrible day. But subsequently, the euro's gains against thepound are preventing the DAX and the rest of the euro zoneindices from properly joining in with the rally seen in the UK,"said Connor Campbell, an analyst at Spreadex.The factors at play in the market on the day were currencyindex entanglements, a bit of U.S.-China trade hopes and somebad data from the U.S., Campbell said.Trade optimism was prompted after Reuters reported thatChina has made proposals on issues like forced technologytransfers as it works to end their trade war as the next roundof talks start in Beijing.Subsequently, White House economic adviser Larry Kudlow saidWashington could lift some tariffs. European banking stocks fell the most on thepan-region index as bond yields continued to decline, keepingalive fears of a slowing global economy. London's Prudential PLC gave up 2.3 percent.Swedish banks were the worst hit, as fears that arapidly-growing money laundering scandal centered aroundSwedbank - the country's biggest lender - wouldspread to other banks. Shares of Swedbank slid 7.8 percent, while SEB andHandelsbanken lost more than 6 percent, making thetrio among the biggest drags on the STOXX 600.National Grid fell 3.3 percent after BBC reportedthat the opposition Labour Party plans to renationalise theutility. Meanwhile, German mobile operator 1&1 Drillisch's almost 15 percent tumble on fears it could suspend dividends for5G spectrum auction bid was the biggest on the region'sbenchmark index. Auto stocks fell as Fiat Chrysler Automobiles slid 2 percent after Nissan Motor Co's chiefexecutive said he was unaware of discussions about its Frenchpartner Renault SA making a bid for the Italiancompany. Adding to Fiat Chrysler's woes, Volkswagen saidit was not interested in a partnership with the company.Losses on the STOXX 600 were limited gains in healthcarestocks as international companies, which typically gain fromweakness in the pound, such as pharmaceutical giants AstraZeneca and GlaxoSmithKline rose more than 1.5 percenteach.
German industrial gases group Linde was among topboosts, up 1.8 percent as UBS raised its price target on thecompany.
Tech stocks also staged a come back with French Itservices company Capgemini up 3.8 percent
(Reporting by Agamoni Ghosh, Medha Singh and Susan Mathew,editing by Larry King)
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