Equity indexes moved in and out of positive territory several times, taking their cue from the bond markets. Rising bond yields have been a major factor in pushing down equity prices in the last few days.
At 1245 GMT, the pan-European FTSEurofirst 300 index of top European shares was down 0.2 percent at 968.69 points, extending its decline into a third session. Earlier in the session it was up more than 1 percent, as high as 981.24.
"The market got a bit ahead of itself on the (ECB) bond buying ... It's hard to work out what's happening," said Sean Power, equity analyst at City Index.
The European Central Bank stepped in to stem an accelerating sell-off of euro zone government bonds on Wednesday, traders said, after the United States called for more decisive action to halt a spreading sovereign debt crisis.
Initially, this had the effect of bringing Italian sovereign bond yields below 7 percent, the level widely regarded as unsustainable. But by late morning, yields were up at 7.17 percent.
Italy's FTSE MIB was down 0.1 percent, and has lost more than 24 percent in 2011.
Strategists said political uncertainty as Italy formed a new government would continue to unnerve investors. Prime Minister designate Mario Monti unveiled Italy's new government on Wednesday after an intense two days of consultations aimed at staving off a major financial crisis, but he may still face an early election.
"There will be scepticism about his ability to do anything meaningful about bringing down the debt level," said Ian King, head of international equities at Legal & General, which has 356 billion pounds ($562 billion) under management.
"With all the uncertainties, equities will find it hard to make much progress from here. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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