By Josie Cox and Tommy Stubbington

European stocks gave up early gains Thursday, with investors cautious after a recent run to multiyear highs.

Markets opened higher, but fell after lackluster U.S. economic data, which weighed on Wall Street stocks.

The Stoxx Europe 600 index closed little changed. The index climbed to a fresh 6 1/2 -year high earlier in the week fueled by the easing measures introduced by the European Central Bank last week, but has since fallen slightly.

Some investors are concerned that the rally has left stocks looking expensive, given the lack of earnings growth in Europe.

BNP Paribas Investment Partners, which manages EUR492 billion ($665.78 billion) of assets, said Thursday it has reduced its overweight position in equities to neutral.

"We have argued that higher equity prices should be supported by higher earnings and this is happening only partly," said the firm's chief economist Joost van Leenders.

"We think this long-lasting rally may lose steam and thought it prudent to lock in profits on our overweight," Mr. van Leenders said.

Meanwhile, oil prices continued to surge as the conflict in oil-producing Iraq intensified.

Islamist militants swept out of northern Iraq on Wednesday to seize their second city in two days, threatening Baghdad and pushing the country's besieged government to signal that it would allow U.S. airstrikes to beat the advance.

The price of a barrel of Brent crude reached $112.34, close to its 2014 high.

Even so, the spillover into wider financial markets was limited.

London's FTSE 100 and Germany's DAX both closed little changed.

Elsewhere, the Kiwi dollar surged Thursday after New Zealand's central bank raised interest rates for the third time this year, sending the euro to a 13-month low against the New Zealand dollar in European trade.

The move emphasizes the expanding rift between the common European currency and higher-yielding units.

The euro tumbled to 1.5567 New Zealand dollars--its weakest since May 16 last year--after the bank raised rates by 0.25 percentage point to 3.25%.

"This served as a hawkish surprise for markets have been pushing back bets on aggressive further tightening ahead of the meeting," Citigroup strategists wrote in a note.

This also presents a contrast to the ECB, which last Thursday lowered its main lending rates and cut the interest rate on its deposit facility to negative for the first time.

As a result, the euro has been increasingly cheap to borrow and sell in favor of higher-yielding currencies, fulfilling a role known as a funding currency. It has dropped around 1.5% versus the Norwegian krone, for example, while the Polish zloty has climbed to its strongest level in more than a year against the euro.

Write to Josie Cox at josie.cox@wsj.com and Tommy Stubbington at tommy.stubbington@wsj.com

(END) Dow Jones Newswires

June 12, 2014 12:30 ET (16:30 GMT)

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