By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets wavered around the flat line on Wednesday as investors remained cautious ahead of European Parliament elections and euro-zone PMIs due later in the week.

The Stoxx Europe 600 index rose 0.1% to 338.58, setting it on track for its first gain in three days.

Posting one of the biggest losses in the benchmark, shares of Wm Morrison Supermarkets PLC dropped 3.1% after Deutsche Bank cut the food retailer to sell from hold. The analysts argued that after a 10% rally over the past two weeks, there aren't enough strong fundamentals to push the stock higher.

Shares of BNP Paribas SA gave up 1.6% after HSBC cut the French bank to neutral from overweight and after Bloomberg reported U.S. authorities are seeking $5 billion from the company to settle a probe into sanctions violations.

On a more upbeat note, A.P. Moeller-Maersk A/S gained 3.8% after the Danish oil and shipping giant upgraded its full-year outlook after posting a 62% increase in first-quarter profit.

European Parliament elections

More broadly, investors were hesitant of making big moves ahead of elections for the European Parliament. The FTSE 100 index slipped 0.2% to 6,790.26, while France's CAC 40 index fell 0.3% to 4,440.61. Germany's DAX 30 index rose 0.1% to 9,649.95.

The elections kick off on Thursday, when voting begins in the U.K. The last countries vote on Sunday, and the results from all 28 member states should start to be revealed on Sunday night.

After a period of low growth and tough austerity measures, euroskeptic parties are expected to get more seats in parliament than ever, which could turn out to be a decisive factor in Europe's future. However, several economists note that the anti-European parties are opposing the EU for different reasons, which could make it hard for them to join forces and actually pose a threat to further European integration.

"The risk of anti-European parties winning strong support is counterbalanced by their heterogeneity and lack of majority," analysts at Société Générale said in a note ahead of the elections.

BOE minutes

In the U.K. on Wednesday, minutes from the Bank of England's May policy meeting showed all nine members of the Monetary Policy Committee voted in favor of keeping rates at a record low of 0.5% and making no changes to the bank's quantitative-easing program. Analysts noted that the minutes showed a more hawkish tone, as there was a "range of views" on the Monetary Policy Committee and that "for some members the monetary policy decision was becoming more balanced."

Nick Beecroft, senior market analyst at Saxo Capital Markets, said in emailed comments that we should expect to see the first dissenting votes emerge over the next quarter.

"But maybe as early as next month if this morning's release showing a surge in retail sales in April is indicative of an acceleration in growth," he added.

The pound (GBPUSD) rose after the minutes, trading at $1.6893, up from $1.6842 late Tuesday.

Also on investors' minds on Wednesday were euro-zone consumer-confidence data due at 3 p.m. London time, or 10 a.m. Eastern Time.

On Thursday, euro-zone purchasing managers' indexes will be released. Any weakness in the data could increase bets that the European Central Bank will loosen monetary policy at its June meeting, as ECB policy makers have hinted heavily that they're ready for some easing action.

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