Europe close: Commodity woes knock stocks down

Stocks ended at their worst levels of the session, weighed down by selling in Basic Resources and Oil & Gas names.

By the close the benchmark Stoxx 600 had reversed course to drop 0.70% to 389.21, alongside a drop of of 0.58% in Germany's Dax to 12,814.79.

France's Cac-40 was down by less, retreating by 17.07 points to trade at 5,293.65. Losses in Basic Resources shares sent the Stoxx 600 sector gauge down by 2.99% to 374.58, alongside a 1.58% drop in the Oil & Gas sector sub-index to 296.51.

In the background, front month Brent crude oil futures lost their grip on technical support at $46.64 a barrel on the ICE.

Market chatter was referencing a bearish report out of Morgan Stanley and continued reports of increasing output in Libya as the chief triggers behind the move.

On 16 June, analysts at Morgan Stanley said OPEC's goal of pushing global oil inventories back to their five-year average might "remain elusive for some time to come".

If confirmed on a close-of-day basis, technical analysts at Web Financial Group believed that could see the global benchmark for oil drop below the $40.0 a barrel mark. However, they cautioned that investors might be best served buy waiting for a weekly close below $46.64.

Against that backdrop, investors were digesting mixed remarks from two top officals at the US central bank.

Speaking overnight, the head of the Federal Reserve bank of Chicago, Charles Evans, said he was dismayed by the fact that inflation in the States had run consistently below target for eight years.

Yet on Tuesday afternoon his opposite number at the Boston Fed took a different tack, warning about the financial stability risks that went hand-in-hand with low rates.

On the economic front, figures from the European Central Bank showed that the euro area's current account surplus printed at €22.2bn for April.

Factory gate prices in Germany slipped from a 3.4% year-on-year clip in April to 2.8% for May (consensus: 2.9%), according to the country's Ministry of Finance.

Still on the economic calendar for Tuesday, Belgium's central bank was set to publish its consumer confidence survey for June at 1400 BST.

In corporate news, Safran announced that China's ICBC Leasing inked an $1.1bn deal to buy its LEAP-1A engines to power 40 Airbus A320neo airplanes.

Mediaset acquired an 11.1% stake in Mediaset Premium from Spain's Telefonica.

A consortia of firms, Total among them, won the 15th auction for a shallow water oil and gas block in Mexico.