Europe close: Shares finish off lows even as Basic Resources fall into bear market

To take note of, most Asian bourses had traded higher overnight, but not Hong Kong's Hang Seng, which entered into a so-called 'bear market' after extending its fall from its most recent peak to over 20%.

On a related note, shares in European Basic Resources companies also fell into bear market territory on Tuesday.

By the end of trading, the Stoxx 600 had drifted 0.05% or 0.20 points lower to 375.31, alongside a rise in the French Cac-40 of 0.27% or 14.16 points to 5,283.79 and a retreat for the German Dax of 0.13% or 16.07 points to 11,970.27.

Euro/dollar meanwhile was 0.06% lower to trade at 1.15874, but Brent crude oil futures gained 2.04% to $78.98 a barrel on the ICE, reportedly on the back of concerns that tropical storm Florence might negatively impact on supplies.

Hence the 1.42% jump in the Stoxx 600's gauge of Oil&Gas firms to 341.06, even as another for the Basic Resources space retreated by a further 0.77% to 414.16.

Earlier, Reuters had reported that Beijing was set to ask the WTO for authorisation to levy sanctions on US-made goods after Washington ignored a ruling against $8.4bn of anti-dumping duties that it placed on Chinese goods in 2013.

Further afield, investors were also waiting on the Argentine central bank's latest policy meeting, amid mild selling pressure against the country's currency and that of its northern neighbour, Brazil, which some consider a sort of bellwether for emerging markets more generally.

Against that backdrop, Bloomberg quoted Bank of America-Merrill Lynch strategist, Tommy Ricketts, as saying: "If the EM currency crisis becomes global and cross-asset in nature, we think stress will stem from Europe, as it did from Japan in 1998, before finally reaching U.S. shores."

According to the ZEW institute, Ricketts wasn't alone in monitoring the risks to the euro area from EMs.

ZEW's closely-followed confidence index for Germany, which is based on a survey of analysts' opinions, improved by 3.1 points in September to reach -10.6 (consensus: -14.0).

"During the survey period, the currency crises in Turkey and Argentina intensified, while German industrial production and incoming orders were surprisingly low in July.

"[...] which may in part be attributable to the new trade agreement between the USA and Mexico," said ZEW President Professor Achim Wambach.

The economic calendar was otherwise very light on Tuesday.

Before the opening bell, INSEE reported a 12,500 person increase in French non-farm payrolls during the second quarter to reach 25.179m.

Separately, figures from Eurostat revealed a 0.4% rise quarter-on-quarter in euro area employment over the three months to June.

On the corporate side of things, Deutsche Bank recovered from early selling after Spiegel reported that Berlin was open to a merger between the lender and rival Commerzbank.

Earlier, the Financial Times had reported that the lender's top brass had decided to prioritise the reduction of the lender's funding costs following a surge in the same.

Steel giant ArcelorMittal on the other hand slipped after it increased its bid price for indebted Essar Steel India to roughly $5.8bn (£4.461bn), Bloomberg reported, citing people familiar with the matter.

In parallel, shares of Spanish lender Bankia were lower after the country's economics minister, Nadia Calviño, ruled out an imminent sale of the government's stake due to the stock's current low price.

Bankia was also weighed down by negative comments out of Jefferies who described the lender as a "value trap", saying: "Bankia's higher mortgage exposure and substantial hedging support that is expected to run off suggests margin pressure in a sustained low-rate environment.