Europe close: Oil price decline weighs on shares

The benchmark Stoxx Europe 600 index gave back 0.38% and France’s CAC 40 was 0.14% lower, while Germany’s DAX retreated 0.44%.

Meanwhile, oil prices retreated, with West Texas Intermediate down 1.2% at $49.38 a barrel and Brent crude 1.4% weaker at $50.08. This pushed the Stoxx 600 oil and gas index 1.07% lower.

Oanda’s Craig Erlam said: “Oil is off more than 1% having gapped lower overnight after the American Petroleum Institute reported a larger build in inventories. This comes as the market had already turned more bearish, leaving it more susceptible to downside moves, after Iraq threw a spanner in the works of the OPEC deal suggesting it should not be involved.

"The gap lower in WTI took it through $49.70 support and may have opened up a move back towards $47.20, potentially triggered today by Energy Information Administration confirming or adding to API’s reported build in crude inventories.”

In corporate news, miner Antofagasta slumped after saying it expects copper output this year to be close to the lower end of its forecast range of 710,000 to 740,000 tons.

Lloyds Banking Group slid as it set aside a further provision of £1bn for compensation for mis-selling payment protection insurance in the third quarter of the year, as net income and profits both fell. For the three months ended 30 September, net income fell 1% to £2.85bn and underlying profits dropped by 3% to £1.91bn.

Heineken was a little lower after a third quarter trading update in which it warned over growing currency headwinds.

Novozymes tumbled after reporting weaker-than-expected earnings for the third quarter, and Bayer was on the back foot even though its third-quarter earnings beat estimates.

Banking group CYBG was weaker after confirming it has made a preliminary non-binding proposal to Royal Bank of Scotland regarding its Williams and Glyn operations.

Pharmaceutical giant AstraZeneca edged lower despite saying its Lynparza drug had positive results from a clinical trial to treat women with mutated ovarian cancer.

International distribution and outsourcing group Bunzl fell back after it said group revenue for the third quarter increased by 7%, with 3% contributed by acquisitions and 4% due to the impact of additional trading days compared to the same time last year. Underlying revenue for the quarter was at a similar level to the third quarter last year.

Metro Bank recovered from early weakness after saying it swung to a pre-tax profit in the third quarter – its first quarterly profit – as revenue surged.

Meggitt declined after announcing it has won a $48m contract for a health and usage monitoring system (HUMS) from engineering and maintenance organisation Guangzhou Hangxin Avionics, for its helicopters.

On the upside, Airbus gained ground despite posting a drop in third-quarter profit, while luxury group Kering surged as it said sales rose 10% in the third quarter.

Santander was also in the black as the lender reported a small increase in third-quarter net profit, although a weaker sterling dented returns from its UK business, while PSA Peugeot Citroen advanced despite posting a 4% drop in third-quarter revenue.

On the macro front, investors were mulling over a survey released earlier showing German consumer confidence is expected to fall to its lowest level in six months in November due to a weak outlook on global economic growth.

GfK’s forward-looking consumer confidence index declined to 9.7 points in November from 10.0 in October, versus expectations for an unchanged reading.This marked the lowest level since April and was the first time the index has reached below the 10-point mark since June.

GfK said the drop in consumer confidence was “a consequence of an external trade environment that has become increasingly difficult”.