European shares steady ahead of ECB; FTSE 100 shines on weaker pound

European shares were little changed on Thursday after a meeting between Britain and EU leaders on a trade deal failed to yield a breakthrough, while a European Central Bank (ECB) decision due later in the day kept investors from making big bets.

The pan-European STOXX 600 index was flat, while London's FTSE 100 rose 0.4% and was set for its eight straight session of gains, as the pound resumed its slide.

British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen gave themselves until the end of the weekend to seal a new trade pact after failing to overcome persistent rifts at a dinner meeting on Wednesday.

Around $1 trillion in annual trade, currently free from tariffs and quotas, is at stake if there is no agreement by the end of the month when Britain leaves the bloc.

The European Union summit is set to begin on Thursday with leaders likely to unblock a stalled 1.8 trillion euro ($2.18 trillion) pandemic aid package as Poland and Hungary appeared to be edging toward an agreement.

"The breakthrough between Germany, Poland and Hungary should generate some positivity because it takes away some of the uncertainty...that grants are finally going to be imbursed and that the recovery and resilience fund is not going to be in trouble," said Bert Colijn, a senior eurozone economist at ING.

"But uncertainty around Brexit is increasing since we haven't seen or heard anything tangible come out of the negotiations that would suggest we are getting closer to a deal."

Investors will also be watching for the outcome of a keenly awaited meeting of the ECB where it is expected to unveil details of fresh stimulus measures.

The decision is due at 1245 GMT, followed by a press conference at 1330 GMT.

ING's Colijn said volatility this session may also be impacted by the indecision on a U.S. stimulus package.

Defensive names topped the STOXX 600, led by food and beverage stocks, while oil stocks tracked crude prices higher.

German meal-kit delivery firm HelloFresh topped the index after it raised 2020 outlook again.

Technology stocks fell, following a sell-off in U.S. peers overnight.