Europe close: Stocks slip as government bond yields continue rising

European stocks slipped as government bond yields were pushed higher by a recent string of solid economic data together with a jump in the price of crude oil on international markets after the Organisation of Petroleum Exporting Countries announced a production cut during the previous session.

The Stoxx Europe 600 down 0.33%, France’s CAC 40 retreated 0.39% and Germany’s DAX fell 1.0%.

Stoxx Europe's gauge of Personal and Household goods slumped 1.72% to 725.58 as the yield on the benchmark 10-year Bund climbed nine basis points to finish at 0.37%, their loftiest level since end January 2016.

Oil prices were firmly in the black after OPEC members decided on Wednesday to slash their production by 1.2m barrels a day to 32.5m barrels starting from January next year. OPEC also called on non-member nations to cut their output by an additional 600,000 b/d.

Brent crude was up 4.55% to $54.31 per barrel and West Texas Intermediate rose 4.1% to $51.54, although some traders continued to wonder aloud whether the cartel's new supply targets will be achieved.

On the data front, the final Eurozone manufacturing purchasing managers’ index came in at 53.7 in November, in line with the 'flash' estimate and up from 53.5 in October, according to IHS Markit.

Chris Williamson, the chief business economist at that same survey compiler, said: “Eurozone manufacturers are enjoying the best improvement in business conditions for almost three years, as the benefits of a weaker currency and strengthening demand helped firms brush off political worries.”

Unemployment in the region declined in October to the lowest rate recorded in the euro bloc since July 2009 according to Eurostat. The unemployment rate fell to 9.8% from 9.9% in September and 10.6% in October 2015.

Pantheon Macroeconomics said it was a “surprising and upbeat headline” but cautioned that big month-to-month movements in these data are often revised.

In China, the 'official' manufacturing sector purchasing managers' index released earlier came in at 51.7 for November, up from 51.2 in October and ahead of expectations for a reading of 51.0.

On the corporate side, oil giants BP and Shell racked up healthy gains as oil prices rallied. BP was also boosted by an upgrade to ‘outperform’ from ‘neutral’ out of Credit Suisse.

Anglo-Swiss miner Glencore was on the front foot after it said its plans to reduce debt as resource prices retreat is near completion, and the company intends to return $1bn to its shareholders next year.

Rio Tinto edged lower after earlier gains as it confirmed that it is cooperating with inquiries from the relevant authorities relating to the impairment included in the company's 2012 accounts in respect of Rio Tinto Coal Mozambique.

The statement followed a press report in earlier in the week stating that the company was facing an investigation by the US Securities & Exchange Commission on the timing of the $3bn in impairment charges.

Swedish medical equipment firm Elekta slumped after its results missed expectations.

TalkTalk was also under the cosh after a downgrade by JP Morgan Cazenove.

Daily Mail & General Trust was in the black as it reported a drop in adjusted pre-tax profit and operating profit but a rise in revenue for the year, with results ahead of expectations overall.

Rolls Royce advanced as it announced plans to cut around 800 jobs worldwide to make savings in its marine business.