Europe close: Stocks dip ahead of US CPI numbers

European stock markets drifted lower on Tuesday, as investors eyed US inflation data due out the next day, while shares in Swedish property company SBB slumped as it delayed its dividend payment and pulled a rights issue.

The pan-European Stoxx 600 index slipped 0.33% to 465.41 with nearly all the major bourses down alongside, led by a 0.59% decline for France's Cac-40 to 7,397.17.

Germany's Dax on the other hand was up by 0.02% to 15,955.48.

"Investors are treading carefully ahead of the key US inflation report out tomorrow as economic data becomes king while markets assess what is next for interest rates,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The Bank of England’s decision on Thursday is looming large, with another 0.25% hike expected, to squeeze more exuberance out of the economy and bring down still painful inflation. The latest British Retail Consortium numbers show the insidious effect price hikes are having. Consumers are spending more, but gaining less for their money, with overall retail sales up 5.1% but volumes down.”

In economic news, UK house prices fell in April after three consecutive months of growth, according to data released by Halifax on Tuesday.

France's trade deficit narrowed in seasonally adjusted terms from €9.3bn for February to €8.0bn in March (consensus: -€9.3bn), as imports fell by 3.1% on the month, against a 1.2% decline in exports.

China reported better-than-expected exports in April, although growth slowed, while imports fell again, according to data released on Tuesday.

Exports rose by 8.5% year on year $295.42b, compared with an increase of 14.8% in March and above expectations for a rise of 6.4%.

On the equities front, shares in SBB fell as it pulled a 2.63bn Swedish crowns rights issue after S&P Global cut its credit rating to junk.

Banco BPM climbed after Italy's third-largest bank raised its profit target for this year and the next, following stronger-than-expected first-quarter earnings.

Direct Line fell sharply as the insurer said on Tuesday warned that rising claims in its motor segment will put pressure on earnings.

Victrex tanked after reporting weaker first half profits.