Europe close: Stocks edge lower amid deluge of economic data
European equity markets slid on Tuesday, as investors analysed a raft of economic reports amid growing expectations that the European Central Bank will announce additional stimulus measures on Thursday.
The benchmark Stoxx Europe 600 index closed down 0.31%, while Germany’s DAX shed 1.06% and France’s CAC 40 fell 0.87%.
As of 1636 GMT, the euro was on the front foot against the main currencies, gaining 0.47% and 0.40% against the dollar and the pound respectively and rising 0.15% against the yen, while Brent crude was down 0.59% to $44.35 a barrel.
“Strong data from the Eurozone has made investors jittery about the prospect quantitative easing,” said IG’s senior market analyst Chris Beauchamp.
“It appears that markets are now having doubts at the eleventh hour. Certainly, it does seem odd to contemplate fresh easing when unemployment in the Eurozone’s strongest pillar continues to touch fresh lows.”
On the macroeconomic front, German unemployment data was encouraging, showing a bigger-than-expected decline in November, while the unemployment rate dropped to 6.3% from 6.4% - the lowest level since German reunification and better than anticipated.
Manufacturing activity in Germany hit its highest level in three months in November. Markit's PMI rose from 52.1 in October to 52.9, exceeding expectations for a 52.6 reading.
As far as the Eurozone is concerned, manufacturing figures showed the recovery in the bloc gathered pace in November.
Markit’s final manufacturing PMI rose from 52.3 in October to 52.8, in line with last month’s “flash” estimate and the highest level since April 2014.
Unemployment in the euro bloc dropped to a three-year low of 10.7% in October from 10.8% in September, compared with expectations for an unchanged reading.
“October’s Eurozone unemployment data confirmed that the region’s steady labour market recovery has continued,” said Jennifer McKeown, senior European economist at Capital Economics.
“But the bigger picture is that unemployment remains too high to boost wage growth and inflation.”
In company news, French hotel group Accor gained 2.84% after saying it acquired three hotel asset portfolios from European investors for €284m.
Shares in German utility RWE rallied 17.6% after the European Commission approved the UK government's support for converting the Lynemouth power station from coal to biomass.
On the downside, industrial gases company Linde tumbled 14.4% after cutting its 2017 profit target. Zurich Insurance was also on the back after it announced that its chief executive Martin Senn was stepping down.
Volkswagen fell 1.87% after the German carmaker said its US sales fell 24.7% year-on-year as a result of the continuing emissions scandal.