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Europe shares close down after EU growth revisions

European equities closed lower on Tuesday after the European Union's Commission released a relatively subdued outlook for the economy in its Autumn forecast.

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The pan-European FTSEurofirst 300 Index provisionally closed down 0.2 percent at 1,290.60 points, off its five-year highs, with data showing the euro zone economy is still expected to shrink this year. Car makers led European equities lower following disappointing earnings announcements, with BMW leading the German DAX down 0.4 percent.

The Commission, the EU's executive arm, said it expected unemployment in the 17-member euro zone to remain at around 12.2 percent until 2015, when it is forecast to fall to 11.8 percent.

The euro zone's economy is expected shrink this year by -0.4 percent, it said, before recovering to grow by 1.1 percent in 2014. This forecast marked a slight downward revision from its earlier prediction of 1.2 percent growth next year.

(Read More: EU: Euro zone unemployment to remain at record high)

Euro zone producer prices were also muted on Tuesday, moving higher by just 0.1 percent on the month, compared to a Reuters poll for a 0.2 percent increase. Prices compared to the same month in 2012 showed a fall of 0.9 percent.

Central banks watched

Asian equity markets were mixed in choppy trade on Tuesday as investors looked ahead to a busy week of central bank meetings and economic data.

The policy committees of the European Central Bank (ECB) and the Bank of England both meet on Thursday, while U.S. third-quarter gross domestic product is due on Thursday, followed by October non-farm payrolls data on Friday.

U.S. stocks also fell on Tuesday, with equities retreating after two days of gains, as Wall Street opted to bypass data showing the services industry expanded more-than-expected in October.

There are expectations that the ECB could cut rates when it meets on Thursday, particularly following a plunge in inflation to 0.7 percent on year in October, well below the central bank's target of just under 2 percent, and amid worries that a strong euro could hurt exports.

Spain's jobless numbers continue to rise, according to data from Spain's Labor Ministry on Tuesday, with 87,028 more registered without work in October, leaving 4.81 million people jobless.

There was some positive news for the U.K.'s service sector, which showed an increase at its fastest rate since May 1997 in October, according to financial data company Markit. The services purchasing managers' index (PMI) rose to 62.5 in October from September's 60.3, easily beating economists' forecasts for a fall to 59.8.

(Read More: UK service sector grows at fastest pace in 16 years)

BMW shares fall

In stocks news, shares of German carmaker BMW closed down 2.76 percent after it reported that its third-quarter revenue had slipped despite an increase in profits.

Renault fell 2.47 percent after shares in Japanese partner Nissan tumbled following a profit warning. The Autos sector closed down 1.13 percent.

Shares in U.K. retailer Marks & Spencer closed higher by 4.49 percent after it reported a 3.2 percent increase in its food business which cushioned the company's second-quarter results.

(Read More: M&S clothing sales fall for 9th quarter in a row)

Britain's FTSE 100 closed down by 0.4 percent on Tuesday, with insurer RSA sinking on the back of a profit warning. RSA provisionally closed down 6.27 percent after saying that insured losses caused by recent severe weather in Europe and Canada were"materially above assumptions" and that returns to shareholders would suffer.

Meanwhile, embattled security firm G4S reported challenging conditions in its U.S. and European markets on Tuesday, despite posting adjusted revenue that was 6.4 percent higher on the year; shares closed down by 1.69 percent.

(Read More: Emerging market growth brings cheer to embattled G4S)

Imperial Tobacco shares closed up 3.11 percent after the tobacco company reported a profit rise but highlighted that developed markets were still tough.

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