Europe close: Markets slide amid mixed Eurozone data

European stocks edged lower on Tuesday, as a series of mixed economic reports from the Eurozone weighed on sentiment.

The benchmark Stoxx Europe 600 index closed down 0.66%, while Germany’s DAX and France’s CAC 40 lost 0.35% and 0.31% respectively.

The euro was broadly flat against the dollar and the yen but gained 0.13% against the pound, while Brent crude climbed 1.93% to $48.27 a barrel.

Mixed data in the Eurozone

On the data front, German inflation fell to zero growth in the year to September from a 0.2% increase in August , compared with analysts’ expectations of a 0.1% year-on-year increase.

The harmonised consumer price index for Germany was down 0.2% in September 2015 year-on-year, compared with a 0.1% increase in August and estimates of 0%.

“September’s drop in inflation back below zero for the first time since January highlights that price pressures are very subdued and will add to pressure on the ECB to increase its policy support,” said Jessica Hinds, European economist at Capital Economics.

Meanwhile, economic confidence in the Eurozone edged slightly higher in September, as the region seemed untroubled by a potential slowdown in China.

The European Commission’s economic sentiment indicator – which combines the business and consumer measures – rose from 104.1 in August to 105.6 in September, reaching its highest level since June 2011.

Analysts had expected the index to remain unchanged from the previous month.

Glencore, VW rebound

In company news, Volkswagen ended a choppy session down 3.55% as it prepares to face multi-billion dollar lawsuits over the emissions scandal.

VW’s new chief executive Matthias Mueller outlined the company’s “comprehensive” plan of action to ensure its diesel models will be able to meet emissions standards.

Meanwhile, it emerged the stock will be removed from the Dow Jones Sustainability Indices from 6 October due to the emissions cheating.

Glencore rallied 16.9%, recovering from a 29% fall on Monday, which saw the stock hit its lowest since its IPO in 2011, after Investec said its equity value is zero at current spot prices.

“For now, it seems that the rush for the exit has stopped in Glencore, but it is too early to say that a bottom has been reached, especially with the week’s China data still to come,” said IG’s senior market analyst Chris Beauchamp.

However, Citigroup and Bernstein came out in defence of the mining giant, saying the market’s response to concerns around balance sheet and liquidity, as seen through the sharp drop in the shares and rise in CDS spreads, was overdone and the stock still hold value.