Europe ends in the red as commodities slide; earnings and data shake up sentiment

Key Points
  • The pan-European Stoxx 600 closed down 0.59 percent provisionally, off its session lows, with most sectors ending in the red
  • Basic resources was the biggest loser in trade, closing over 2.5 percent down
  • Tesco posted strong gains after regulators approved its takeover of Booker

European stocks finished Tuesday's trading day in negative territory, as a sharp decline in commodities weighed on investor sentiment.

The pan-European Stoxx 600 closed down 0.59 percent provisionally, off its session lows, with most sectors ending in the red.

Looking to bourses, the U.K.'s FTSE 100 failed to hold onto gains by the close, finishing down 0.01 percent. France's CAC 40 and Germany's DAX, meanwhile, slipped further, down 0.49 percent and 0.31 percent respectively.

On the sector front, basic resources tumbled 2.73 percent, making it Europe's worst performer on Tuesday. The sector was weighed down after disappointing data came out of China and metal prices declined. Industrial production, retail sales and fixed asset investment numbers in the world's second-largest economy missed expectations.

Several London-listed miners consequently fell to the bottom of the index, with Anglo American, Rio Tinto and Glencore all ending down 2.5 percent or more each.

A decline in oil prices and energy stocks also weighed on investor sentiment, with both Brent and WTI falling roughly 2.5 percent by the market close, on the back of further rises in U.S. output.

Central bank transparency is a ‘duty,’ ECB’s Draghi says

Nonetheless, the main focus in Europe remained on earnings.

Telecoms outperformed most sectors, closing up 0.36 percent, with the U.K. telecoms giant Vodafone leading the way, after it raised its full-year earnings growth to around 10 percent from 4-8 percent. The numbers sent the stock to close up over 5 percent.

Technology stocks ended in the black, with Simcorp reporting third-quarter results above expectations. The stock rose to the top of the STOXX 600, soaring 10 percent.

Tesco rose 6.2 percent after regulators approved its takeover of Booker. Booker Group meanwhile jumped 6.74 percent.

On the opposite end of the spectrum, Germany's Henkel warned against difficult conditions in the consumer goods market during their third-quarter results. The stock fell 4.26 percent.

Utilities firm RWE announced a 9.3 percent increase in its nine-month core earnings, however the share price slipped 5.56 percent.

Altice, meanwhile, sank over 13 percent after a number of brokers cut their price targets and expectations on the telecoms stock.

In terms of data, flash gross domestic product figures in Germany showed an expansion driven by exports and investments. GDP was up 0.8 percent in the third quarter from 0.6 percent in the previous quarter.

In the U.K., new inflation numbers came in lower-than-expected with consumer prices up 0.1 percent month-on-month and 3 percent year-on-year versus 0.2 and 3.1 percent expected, respectively. Sterling dropped on the data but recovered throughout trade.

Overseas, U.S stocks were under pressure around Europe's close, as investors monitored the drop in General Electric shares, while sentiment was also dampened by signs of a potential global economic slowdown due to China's data, and concerns around U.S. tax reform.