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Europe ends lower as banks weigh; investors look to ECB, OPEC

European stock markets finished lower on Tuesday as investors pondered key events ahead this week including meetings of the European Central Bank and OPEC.

The pan-European STOXX 600 closed down 0.8 percent provisionally on Tuesday, with all major bourses ending 0.5 percent down or more.

However, the STOXX 600 ended higher on the month, closing up around 1.8 percent.

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Investors have been on edge since U.S. policymakers hinted at a U.S. Federal Reserve interest rate hike in June, ahead of market expectations.

Fed Chair Janet Yellen said last week that a rate hike could be appropriate in the coming months. St. Louis Fed President James Bullard said markets were "well-prepared" for a summer hike on Monday.

Another focus will be the European Central Bank meeting on Thursday and a potential upgrade to the euro zone inflation forecast.

OPEC is also meeting on Thursday in Vienna and markets are on alert for any announcement that could affect oil production.

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Crude oil prices have risen over the last two months, primarily due to supply outages in Canada and Nigeria.

On Tuesday, Brent crude and U.S. WTI posted gains by Europe's stock market close, despite turbulence earlier in the session. Both Brent and WTI hovered just below $50 per barrel, with rising output from the Middle East capping gains as the summer driving season kicks in.

Basic resources stocks under-performed, as a stronger dollar weighed on metal prices. London-listed miners, BHP Billiton, Anglo American and Glencore all closed sharply lower. However, ArcelorMittal bucked the sector trend, jumping 3.8 percent.

Overseas, U.S. stocks struggled for gains around Europe's close, with consumer stocks weighing on sentiment. Markets in Asia finished mostly higher, with Chinese mainland markets posting sharp gains.

Volkswagen, Italian banks slide

Volkswagen shares fell 2.6 percent on Tuesday after the carmaker reported pretax profit for the first quarter of 3.2 billion euros ($3.5 billion), a 19.3 percent year-on-year decline.

Air France-KLM shares slipped 1.7 percent, after the airline's pilots voted to go on strike over pay conditions.

The Peugeot family are planning to hold talks with the French government to discuss the future of its stake in the carmaker Peugeot PSA Citroen, Reuters reported, citing a source on Monday. Shares ended 1 percent down.

Italian banking stocks closed sharply lower after the Bank of Italy warned on Tuesday that the country's public debt might not decline in 2016, according to Reuters.

Banco Populare sank 7.3 percent, Unicredit slipped 4 percent and BMPS fell 3 percent.

Deutsche Bank was also in focus, after the firm's CEO said at a conference it might not make a profit in 2016, but might resolve some of its litigation issues over the summer, according to Reuters. Shares fell 2 percent.

Spain's Banco Popular outperformed other banks, jumping over 3 percent, despite Berenberg and Citigroup cutting their price target on the stock.

On the data front, euro area annual inflation came in at -0.1 percent for May, according to a flash official estimate on Tuesday. The euro zone's jobless rate came in at 10.2 percent for April, as unemployment dropped by 63,000.

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