Europe close: Oil price drop sees shares skid lower

A sharp drop in crude oil futures sent European stocks skidding lower ahead of multiple key risk events the next day, including the UK elections and US FBI director James Comey's testimony before a senate panel.

At the closing bell, the benchmark Stoxx 600 was drifting lower by 0.06% to 389.18, as the Cac-40 slipped 0.07% to 5,265.53 while the FTSE Mibtel dipped 0.10% to 20,739.91.

Commercial US crude oil stockpiles built unexpectedly last week, according to the US Department of Energy.

The figures were sharply at odds with data released overnight by the American Petroleum Institute showing an inventory draw and served to send the price of oil immediately lower.

West Texas Intermediate crude oil futures were retreating 4.6% to $46.06 a barrel on the ICE.

Against that backdrop, all eyes were on Spanish lenders following news that Santander had picked up troubled rival Banco Popular for a symbolic €1. However, in parallel, Santander announced a fresh capital raise of €7.0bn in order to buttress Popular's balance sheet.

The day before, the Single Resolution Board had judged that Popular was either failing or likely to do so.

The Stoxx 600's gauge of lenders' shares closed up by 0.72% at 180.80.

In parallel, euro/dollar slipped 0.30% to 1.1245 after Bloomberg cited European officials according to whom the ECB was set to lower its short and medium-term CPI forecasts for the single currency bloc.

Economic data released on Wednesday did little to bolster the euro.

German factory orders shrank by 2.1% on the month in April (consensus: -0.3%), according to the country's Ministry of Finance.

Spanish industrial production edged higher by 0.1% month-on-month in April and was 0.7% higher versus the same month one year ago.

Economists had expected a rise of 0.5% on the month and 1.2% on the year.

Italian retail sales volumes were flat in April when compared to the prior month (consensus: 0.2%).

German utility groups E.On, RWE and EnBW were all higher ahead of an expected court ruling, on Wednesday, regarding whether they will recoup roughly €6bn in taxes paid for their use of nuclear fuel rods.

BNP Paribas was also in the news after the Belgian state lowered its stake in the lender to 7.74%.

Bayer was moving lower after announcing that it had cut its stake in chemicals subsidiary Covestro from 53.3% to 44.8%.