European equities closed largely lower on Tuesday, in the wake of declines in Asian markets and falls in shares of two major banks—HSBC in the U.K. and Deutsche Bank in Germany.
The pan-European FTSEurofirst 300 closed around 0.5 percent lower, having hit a three-and-a-half month low during the session.
London's FTSE 100 closed around 0.5 percent lower, while the German DAX closed down around 0.6 percent and the French CAC closed only 0.2 percent lower. Some peripheral markets closed higher, including Greece's stocks.
Market attention in the U.K. was on HSBC, after Europe's biggest bank announced plans to cut costs by as much as $5 billion within two years, laying off as many as 25,000 staff. It also plans to sell its Turkey and Brazil operations and increase its investments in Asia.
"We recognize that the world has changed and we need to change with it," the bank's chief executive, Stuart Gulliver, remarked in a statement.
Deutsche Bank shares closed down around 1.9 percent on Tuesday on the news that prosecutors had searched the bank's offices in Frankfurt. The bank said that no employees at the company were being targeted in the raid.
Elsewhere, Greece continued to rattle sentiment. The country's international creditors have suggested extending the country's bailout program until the end of March 2016, but disagreements over the conditions attached to the continued support and what would happen afterward risk undermining that plan, three people familiar with the negotiations told Reuters on Monday.
U.S. stocks were trading in a narrow range on Tuesday when Europe markets closed, as higher bond yields weighed and investors sought further insight on the timing of a rate hike from economic data.
In Asia, equities turned lower on Tuesday, as downbeat inflation data from China and the prospect of higher U.S. interest rates sooner rather than later weighed on sentiment.
On the data front, a second reading of first quarter gross domestic product (GDP) for the euro zone came in at a 0.4 percent compared to the previous quarter. This was just above earlier estimates.
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