* FTSE MIB and IBEX outperform
* Investors still expect de-escalation of Ukraine tensions
* Russia, United States officials discuss Ukraine
* FTSEurofirst 300 closes down 0.1 pct at 1,343.99 points
* Euro STOXX 50 ends flat at 3,135.97 points
* Adidas warns of hit from Russian rouble and EM currencies
* Italy's Monte Paschi surges by nearly 20 pct
By Sudip Kar-Gupta
LONDON, March 5 European shares steadied on Wednesday as the United States and Russia planned talks to ease tensions over Ukraine, while Spain and Italy outperformed on signs their economies were gathering strength.
The euro zone's blue-chip Euro STOXX 50 index closed flat at 3,135.97 points, but the Spanish and Italian markets - dubbed as the "periphery" by many investors compared to the "core" of Germany and France - fared better.
Italy's benchmark FTSE MIB equity index rose 1.4 percent while Spain's benchmark IBEX index advanced by 0.9 percent, outperforming falls in Germany and France.
The pan-European FTSEurofirst 300 index, which fell 2.2 percent at the start of the week on fears of a conflict between Russia and Ukraine, edged down 0.1 percent to 1,343.99 points.
The Milan and Madrid bourses rose after Markit composite purchasing managers' indexes (PMIs) for Italy and Spain both beat forecasts and came in above the 50 mark that separates growth from contraction.
Shares in Italy's third-biggest bank, Monte dei Paschi di Siena, also surged by nearly 20 percent.
Analysts said speculation about fresh action from the European Central Bank on Thursday to spur the region's economy and fend off the threat of ultra-low inflation was also acting as an extra support for European equities.
Andrea Williams, European equities fund manager at Royal London Asset Management, backed Italian and Spanish stocks such as Italian airport and motorway operator Atlantia, Spanish electricity grid operator Red Electrica and Spanish oil group Repsol.
"We don't have a lot of exposure to the periphery but I can see that their economies are improving," said Williams.
In spite of a hit to equity markets this week from Ukraine, European stock markets have maintained their upwards trajectory from last year, with the FTSEurofirst 300 up by around 2 percent after having risen 16 percent in 2013.
Russia has effectively occupied Ukraine's Crimea region after protesters in Kiev forced out Ukrainian President Viktor Yanukovich, a Moscow ally.
German sportswear group Adidas fell 3 percent in heavy volumes on Wednesday after warning that its 2014 results would take a significant hit from weakening emerging-market currencies such as Russia's rouble.
The foreign ministers of Russia, the United States, Britain, and Germany met their French counterpart and French President Francois Hollande in Paris on Wednesday to try to start a diplomatic process to defuse the Ukraine crisis.
Many investors remained confident that the Ukraine situation would gradually de-escalate.
"I would expect an eventual political solution, which is why the markets are taking it in their stride for now," said Takis Christodoulopoulos, an analyst at hedge fund Toscafund.