European Stocks Close Weak As Investors Digest Economic Data, Await ECB Meeting

European stocks closed lower on Tuesday, weighed down by losses in the energy sector as oil prices tumbled. Investors also digested a slew of economic data from the region, and looked ahead to the European Central Bank’s monetary policy announcement due later in the week. Middle East tensions weighed as well on sentiment.

The pan European Stoxx 600 fell 0.8%. The U.K.’s FTSE 100 dropped 0.52%, Germany’s DAX edged down 0.11%, and France’s CAC 40 declined 1.05%, while Switzerland’s SMI closed down 0.33%.

Among other markets in Europe, Austria, Denmark, Finland, Iceland, Netherlands, Norway, Poland, Portugal and Sweden ended weak.

Belgium, Greece, Ireland, Russia, Spain and Turkiye closed higher.

In the UK market, Antofagasta, Glencore, BP, Spirax Group, Croda International, Entain, Anglo American Plc, Shell, Mondi and Prudential ended down 3 to 5%.

Scottish Mortgage, Standard Chartered, Melrose Industries, Rio Tinto, Halma, ICP, Centrica, Rentokil Initial and HSBC Holdings also ended notably lower.

IAG climbed more than 4%. Persimmon closed higher by 3.8%. EasyJet, Barratt Developments, JD Sports Fashion, Taylor Wimpey, United Utilities, Hikma Pharmaceuticals, Relx, Convatec Group, Beazley, Berkeley Group Holdings, SSE, British Land, Hiscox, Severn Trent, Admiral Group and Marks & Spencer ended notably higher.

In the German market, Siemens Energy dropped about 4%. Deutsche Bank ended down 2.6% after reports of the sale of some 16 million shares in the German bank priced at 16.01 euros ($17.43) per share.

Porsche, Infineon, Continental, Sartorius, Beiersdorf, BASF, Siemens, BMW, HeidelbergCement and Siemens Healthineers lost 1 to 2%.

Puma rallied more than 5% and MTU Aero Engines gained nearly 5%. Deutsche Telekom, E.ON, Bayer, Qiagen, Adidas, Vonovia and Munich RE climbed 1 to 2%.

In the French market, TotalEnergies ended down 4.8%. The oil major warned that its third-quarter downstream results are expected to decline sharply due to lower refining margins in Europe and elsewhere.

L’Oreal, Dassault Systemes, STMicroElectronics, ArcelorMittal, LVMH, Hermes International, Michelin, Schneider Electric and Legrand lost 1 to 4%.

Teleperformance gained about 2.5%. Unibail Rodamco, Carrefour, BNP Paribas, AXA, Engie, Credit Agricole and Bouygues also closed notably higher.

Shares of Swedish telecom major LM Ericsson shares zoomed 10.8% after the company reported a profit in its third quarter, compared to prior year’s loss.

In economic news, Eurozone industrial production recovered in August largely due to the rebound in capital goods and durable consumer goods output, data from Eurostat showe. Industrial output posted a monthly growth of 1.8% in August, reversing July’s 0.5% decline. The growth came in line with expectations.

France’s consumer price inflation slowed slightly more than initially estimated in September to the lowest level in three-and-a-half years amid a fall in energy prices. The consumer price index climbed 1.1% year-over-year in September, slower than the 1.8% rise in the previous month. In the flash report, the rate of inflation was 1.2%.

Germany’s wholesale prices continued to decline in September, and at the steepest pace in five months. Wholesale prices decreased 1.6% year-on-year in September, bigger than the 1.1% drop in August. Wholesale prices have been falling since May 2023. Data showed a 14.6% drop in wholesale prices of mineral oil products.

German economic confidence strengthened for the first time four months in October as financial market experts expect more interest rate cuts amid slowing inflation, survey results from the think tank ZEW showed. The ZEW Indicator of Economic Sentiment rose to 13.1 from 3.6 in September. The score was above the expected level of 10.2.

UK wage growth softened to the lowest in more than two years in the three months to August, adding support to expectations that the central bank will cut interest rates further at the next meeting.

In the three months to August, average earnings excluding bonus increased 4.9% from the previous year, slower than the 5.1% increase in the three months to July, data from the Office for National Statistics showed.

The unemployment rate fell slightly to 4% in three months to August, while it was forecast to remain unchanged at 4.1%.