Europe close: Stocks dip amid trade tensions, valuations in focus

Stocks moved lower on Tuesday following reports that pointed to the risk of renewed trade tensions with the US and amid a fair bit of market commentary around stockmarket valuations.

"The unpredictability of these markets would be perfectly encompassed by a market led by airlines just as the economic data finally starts to improve and economies ready themselves for an end of lockdown measures," said IG analyst Josh Mahony.

According to the European Union's chief trade negotiator, Phil Hogan, the US had recently pulled back from talks aimed at trying to resolve frictions over the blocs' aid for their respective aerospace industries.

Against that backdrop, the benchmark Stoxx 600 finished down 1.22% at 369.54, alongside a 1.57% drop for the German Dax to 12,617.99 while the FTSE Mibtel fell 1.49% at 19,930.20.

Overnight, the US Nasdaq Composite notched up a fresh record high and the S&P 500 had moved into the green for 2020 for the first time since the onslaught from the pandemic began in March.

Front month Brent crude oil futures were also lower alongside, retreating 0.74% to $40.50 a barrel on ICE.

The news on the economic front continued to make for grim reading.

German exports were reported at down by 31.1% month-on-month for April, their largest drop since 1950, with imports down by the most since the financial crisis.

In parallel, France's seasonally adjusted trade surplus widened to €5.0bn in April, following a €3.2bn deficit for March (consensus: €3.0bn).

French net imports were flat over the first quarter of 2020, Claus Vistesen at Pantheon Macroeconomics.

At the aggregate euro area level, a final reading on first quarter GDP from Eurostat revealed a 3.6% drop quarter-on-quarter (consensus: -3.8%), the largest since at least 1995, when records began.