European benchmarks sank in early trading as caution hung in the air following Wednesday's Federal Reverse meeting minutes, ex-dividend stocks weighed and investors braced for a potentially acrimonious meeting between the leaders of the world's two largest economies.

The FTSE 100 slipped by around 0.80% in London after the opening bell. The CAC 40 dropped 0.60% in Paris and the DAX fell 0.70% in Frankfurt.

Benchmarks in southern Europe were also weaker, with the FTSE MIB in Milan down by more than 1% and the IBEX in Madrid slipping nearly 0.50%.

A renewed sense of caution swept through markets overnight and hung in the air at the opening of the European session after the Federal Open Market Committee meeting minutes, released Wednesday, suggested that the Fed may begin to shrink its balance sheet by selling bonds later in the year.

Ex-dividend stocks were an added weight on markets, with education publisher Pearson (PSO) , Lloyds Banking Group (LYG) , Aviva (AVVIY) and Paddy Power Betfair (PDYPF) , all ex-dividend this Thursday, topping the list of fallers in London with losses ranging between 3% and 7.9%.

Adding further to tensions across markets was a key meeting between President Donald Trump and Chinese leader Xi Jinping, which is scheduled to get underway Thursday, in which the leaders of the world's two largest economies are expected to discuss the pair's relationship.

Trade will be top of the agenda, with President Trump having made clear via his Twitter feed that the meeting will be difficult. Investors are watching closely for a renewed escalation of protectionist rhetoric.

A dovish tone struck by European Central Bank head Mario Draghi in speech on Thursday morning, where he indicated that European monetary policy will remain loose for longer, proved unable to lift markets out of their decline. Although it did send the euro reeling against the U.S. dollar and pound sterling.

Top fallers in Frankfurt were Deutsche Lufthansa (DLAKY) , Volkswagen (VLKAY) , Commerzbank (CRZBY) and BMW (BMWYY) , all with losses of 1.5% or more.

In Paris, Peugeot (PEUGF) , Renault (RNSDF) and Credit Agricole (CRARY) were all found swimming deep in the red, with losses of 1.5% or more.