European markets closed lower on Tuesday, dragged down by banking stocks.
The pan-European Stoxx 600 closed 0.3 percent lower with most sectors and major bourses trading in negative territory.
Banking stocks were the worst performers, with the Royal Bank of Scotland falling to the bottom of the sector. The bank fell more than 5 percent following news that the U.K. government is to sell part of its stake for approximately £2.6 billion ($3.5 billion) — resulting in a loss as it returns the lender back to private ownership after its bailout in 2008.
Elsewhere, tech stocks hit a multi-year high on Tuesday. The positive sentiment towards tech was supported by record high shares of Apple amid its WWDC conference and Microsoft's acquisition of software coding firm GitHub. Many analysts also believe the sector is far from hitting a bubble and the high valuations are justified.
Italy's FTSE MIB was the worst performing index, down more than 1 percent, following a speech by the country's new prime minister in parliament. Political outsider Giuseppe Conte promised "radical change" in his speech and said the anti-establishment government would introduce universal basic income and crack down on immigration.
The Dublin-based firm Smurfit Kappa led the losses, down by more than 6.4 percent. Traders were reacting to a report raising doubts about a possible takeover from International Paper. WPP also fell almost 3 percent after Berenberg analysts said the situation at the ad firm will get worse before it gets better.
Meanwhile, the U.K. government said it was willing to give Twenty-First Century Fox a provisional green light to buy Sky if it agreed to sell its Sky News channel. If Fox's bid for Sky were to be approved, that could trigger a bidding war with Comcast. Shares of Sky rose almost 0.3 percent.
Trade talks and data
Overall, sentiment was dampened by trade news with relations between the U.S. and China dominating. On Monday, the White House said that it would continue to have a strong relationship with Canada, Mexico and the European Union, despite its recently-imposed tariffs on steel and aluminum exports.
Meanwhile, the ongoing Brexit process has met another stumbling block. U.K. Prime Minister Theresa May will not publish a report outlining a future U.K.-EU relationship ahead of a European Council meeting at the end of the month, the Financial Times reported on Monday. Business leaders met with May at Downing Street on Monday, pushing the importance of frictionless trade with the EU rather than tariffs.
Euro area composite PMI figures showed a slight slow down in activity in May. The IHS Markit's final composite purchasing manager's index fell to an 18-month low that month to 54.1.
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