Europe close: Stocks end flat to lower as oil prices reverse course

European stocks ended flat to slightly lower on Tuesday, unable to hold on to earlier gains as oil prices reversed course.

The benchmark Stoxx Europe 600 index ended down 0.4%, France’s CAC 40 fell 0.3% and Germany’s DAX closed flat.

Oil prices gave back earlier gains to trade lower amid fears members of the Organization of the Petroleum Exporting Countries could walk away from next’s month’s meeting with no agreement following reports Russia and Iraq might not take part in the proposed production cut. West Texas Intermediate was down 1.2% at $49.94 a barrel and Brent crude was off 1.4% at $50.74.

Earlier in the day, stocks had been trading a little higher, underpinned by an upbeat reading on German business confidence and strength in the basic resources sector, which gained on the back of firmer copper prices.

The Ifo Institute’s business climate index rose to 110.5 from 109.5 in September, reaching its highest level since April 2014 and beating expectations for a small drop.

The assessment of current conditions edged up to 115.0 from 114.7 and the forward-looking expectations index increased to a two-year high of 106.1 from 104.5.

Pantheon Macroeconomics said: “These are strong data, and suggest that the German economy started Q4 on a very strong note. Indeed, if we continue to see these numbers, it would suggest that GDP growth is accelerating.”

On the corporate front, Italian banks were a drag as shares in Banca Monte dei Paschi di Siena and UniCredit were suspended from trading after the former announced plans to cut 2,600 jobs, close 500 branches and sell bad debt. Both stocks ended in the red.

Switzerland’s Novartis slipped back despite reporting an increase in third-quarter net income, while aerospace and automotive engineering group GKN was also in the red after it posted slower growth and lower trading margins for the nine months to the end of September.

Whitbread also declined. The company sprinkled a 5% dividend hike on a strong set of interim results, but investors overlooked acceleration at the Premier Inn hotels arm to focus on a dip in profits from Costa coffee shops.

On the upside, Randstad was a high riser after the Dutch recruiter posted a 9% jump in third-quarter adjusted earnings before interest, taxes and amortisation, beating analysts’ expectations.

Air Liquide advanced after saying third-quarter revenue was up 24%, boosted by its acquisition of Airgas Inc, while Orange rose after reporting an increase in third-quarter international sales.

Asset manager St James’s Place rallied after reporting a 21% rise in gross inflows for the latest three-month stretch to reach £2.8bn, with the political uncertainty after the referendum not having had any distinguishable impact on its day-to-day business.