Europe close: Markets end on a down note

European stocks edged lower on Tuesday as investors digested a weaker-than-expected reading on German economic sentiment, with miners bucking the trend following well-received results from BHP Billiton and Antofagasta.

The benchmark Stoxx Europe 600 index was down 0.79% to 343.82, France’s CAC 40 was down 0.83% and Germany’s DAX was 0.58% weaker.

At the same time, oil prices reversed earlier losses to trade higher, with West Texas Intermediate up 1.38% at $46.38 a barrel and Brent crude up 1.3% to $48.96.

In corporate news, miner BHP Billiton edged higher despite reporting a record loss in the year to the end of June and slashing its dividend as weaker commodity prices, writedowns and the dam disaster in Brazil took their toll.

Chilean copper mining colossus Antofagasta surged after it reported lower first half revenue but said it had improved earnings and kept its dividend flat thanks to some heavy cost cutting.

Linde was on the front foot after confirming it was in preliminary talks with US industrial gases maker Praxair about a possible merger.

International infrastructure group Balfour Beatty was a bit firmer after being awarded a $697m contract to undertake electrification of the 52-mile Caltrain rail corridor between San Francisco and San Jose, in preparation for the future operation of high speed trains.

On the downside, Swiss lift maker Schindler was lower after it cut the top end of its revenue growth outlook for the year.

Oil services firm Wood Group was higher as it posted a drop in profit and revenue for the first half amid “challenging” conditions in the oil and gas market but reaffirmed its outlook for the full year.

AstraZeneca nudged lower after saying it has completed a licensing agreement with LEO Pharma, a specialist in dermatology care, for the global licence to monoclonal antibody tralokinumab in skin diseases.

On the data front, German investor confidence improved less than expected in August, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.

The index of investor and analyst expectations rose to 0.5 in August from -6.8 the month before, but this fell short of estimates for a reading of 1.8.
However, the current expectations index beat economists’ forecasts for a reading of 50.0, printing at 57.6 compared to 49.8 in July.

ZEW President Professor Achim Wambach said: “The ZEW Indicator of Economic Sentiment has partly recovered from the Brexit shock. Political risks within and outside the European Union, however, continue to inhibit a more optimistic economic outlook for Germany.

“Furthermore, uncertainty about the resilience of the EU banking sector persists.”