Europe close: Stocks move south as geopolitical tension weigh on sentiment

European equity markets edged lower on Wednesday, as the latest developments in Paris weighed on sentiment, while investors looked ahead to the minutes from the US Federal Reserve’s October meeting.

The benchmark Stoxx Europe 600 index closed down 0.14%, while Germany’s DAX slid 0.10% and France’s CAC 40 lost 0.62%.

As of 1637 GMT, the euro was broadly flat against the pound and the yen but lost 0.17% against the dollar, while Brent crude gained 0.46% to $43.77 a barrel.

Too 'soon to judge impact' of Paris attacks

French police killed two suspects in the Parisian suburb of Saint Denis as they launched a raid in search of the suspect attackers behind Friday’s terrorist attacks.

On Tuesday night, a friendly match between Germany and Holland in Hanover was cancelled due to a security alert, while two Paris-bound Air France flights from the US were diverted due to bomb threats.

European Central Bank Executive Board member Yves Mersch warned it was too early to judge the impact that attacks would have on the Eurozone economy.

"We should shy away from drawing premature conclusions about whether the terror attacks will have any economic impact," Mersch said.

"We have no indication of any economic pessimism as a result of the Paris attacks, let alone weaker hard data. Doom-and-gloom talk is not warranted at this stage.”

Fed minutes in focus

The release of the minutes from the latest Fed meeting, scheduled for 1900 GMT, had investors erring on the side of caution, as they look for clues that could strengthen the case for a December interest rates hike.

“With a month until that decision has to be made, US economic data and Fed speeches will be analysed deeper than ever,” said IG’s market analyst Joshua Mahony.

“Tonight’s FOMC minutes forms one part of the jigsaw when trying to ascertain whether a December hike is going occur.

“However, given that the minutes originate from a meeting prior to the jobs report, any dovishness is likely to be largely disregarded and any hawkish tones likely to be prioritised.”

On the macroeconomic front, data released by Eurostat showed industrial production in the Eurozone fell for the first time in three months in September.

Output declined a seasonally-adjusted 0.4% month-on-month compared with an upwardly revised 0.5% gain in August.

On a year-on-year basis, construction output climbed 1.8% year in September compared with a downwardly revised 1.4% drop in the previous month.

In company news, shares in Air France-KLM fell 0.49%, with sector peers Deutsche Lufthansa and International Consolidated Airlines Group losing 1.34% and 3.16% respectively, while French hotel group Accor slid 1.10%.