European shares pared losses in afternoon trade on Thursday after U.S. data showed new claims for unemployment benefits unexpectedly fell last week and U.S. housing starts rose more than expected in January.

At 1336 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,070.47 points after falling to a low of 1,064.64 points earlier in the session.