European Stocks Close Broadly Lower As Investors Digest Economic Data, Await Fed Policy

(RTTNews) - European stocks closed broadly lower on Tuesday weighed down by a weak German business sentiment, political uncertainty in Germany and France, and caution ahead of the Federal Reserve's monetary policy announcement due later in the week.

The pan European Stoxx 600 closed down 0.42%. The U.K.'s FTSE 100 fell 0.81% and Germany's DAX ended lower by 0.33%, while France's CAC 40 edged up 0.12%. Switzerland's SMI climbed 0.33%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden closed weak.

Iceland and Turkiye ended higher, while Ireland closed flat.

In the UK market, Bunzl closed down 5.6%. The business supplies distributor said persistent deflation, particularly in continental Europe, will have a slight impact on its annual profit.

JD Sports Fashion, WPP, Coca-Cola, Diageo, BAE Systems, Marks & Spencer, Hiscox, 3i Group, Barclays, Lloyds Banking Group, B&M European Value Retail and ICP lost 2 to 3%.

M&G, Imperial Brands, Howden Joinery, Informa, Kingfisher, Antofagasta and Shell also declined sharply.

Capita shares tanked 15%. The outsourcing firm saw its revenue drop eight percent in the first 11 months of the year.

GSK, Haleon, Compass Group, Sage Group, Halma and Taylor Wimpey posted modest gains.

In the German market, Brenntag, E.ON, Sartorius, Deutsche Post, Rheinmetall and Fresenius lost 2 to 3.6%. Deutsche Bank closed nearly 2% down. Fresenius Medical Care, RWE and Bayer also ended weak.

Daimler Truck Holding climbed about 2.5%. Siemens, Symrise, BMW and Infineo also closed on a firm note.

In the French market, Vivendi closed nearly 4% down. ArcelorMittal ended down by about 3%. Publicis Groupe, Saint Gobain, TotalEnergies, Veolia, Teleperformance and Societe Generale lost 1 to 2%.

Sanofi climbed nearly 2%. Hermes International, L'Oreal, Safran, LVMH, Dassault Systemes, STMicroElectronics and Edenred gained 0.4 to 1.3%. Airbus Group moved modestly higher after Deutsche Bank upgraded its rating on the stock to "buy" from "hold".

In economic news, the euro area trade surplus fell to EUR 6.8 billion in October from EUR 9.4 billion a year ago, data from Destatis showed. This was also below September's level of EUR 11.6 billion. The fall in surplus reflects a reduction in the surplus for chemicals and related products and machineries and vehicles.

The UK unemployment rate remained unchanged in three months to October, the Office for National Statistics said. The unemployment rate held steady at 4.3% during August to October period.

The UK wage growth accelerated more than expected in the three months to October supporting a case for more gradual interest rate reductions next year as pay increases could revive inflationary pressures. Excluding bonus, annual growth in average earnings came in at 5.2% compared to 4.9% in the three months to September, the Office for National Statistics said.

Business sentiment in Germany fell to the weakest level since 2020 in December as firms were more skeptical about the economic outlook, survey results from the ifo Institute showe, amid the prospect of trade rifts with the U.S. and the uncertainty surrounding domestic economic policies. The ifo business climate index fell to 84.7 in December from 85.6 in the previous month.

Economic sentiment in Germany unexpectedly rebounded in December to its highest level in four months as financial market experts turned optimistic on the announcement of snap elections in February next year and the prospect of more interest rate cuts from the European Central Bank, results of a survey by the think tank ZEW showed.

Switzerland's economy is expected to grow slightly less than previously estimated in the next year amid high uncertainty surrounding international economic and trade policy. The expert group of the federal government forecast gross domestic product to grow 1.5% in 2025 instead of the 1.6% growth estimated previously in September.