European stocks close lower Wednesday, auto sales and gloomy forecast weigh

Key Points
  • Poor sales and a note from Goldman Sachs combined to make it a difficult day for car sellers.
  • Europe's technology stocks were the top performers.
  • Investors also monitored earnings and Brexit talks.

European stocks turned lower in early afternoon trading, dragged down by auto stocks.

The pan-European Stoxx 600 closed provisionally lower by 0.44 percent with investors tracking corporate earnings.

Auto stocks fell 1.88 percent, with Peugeot down by 4.9 percent and Renault off by 3.57 percent. This was after news that European car sales dropped 23.4 percent in the month of September. Volkswagen, Fiat and Renault led the slump, Reuters reported.

The sector had already been placed under pressure by a note from Goldman Sachs that forecast a tricky third quarter for European auto makers.

Europe's technology stocks were the only stocks to average gains. ASML was the top sectoral performer, after the Amsterdam-listed stock beat profit expectations in the third quarter. Its shares jumped 3.52 percent.

Looking at other individual stocks, Dutch paints and coatings maker Akzo Nobel was trading close to the top of the European benchmark. Its shares rose 2.43 percent on Wednesday after the company said core profit jumped 8 percent.

Meanwhile, shares in Germany's Fresenius Medical Care slumped 16.31 percent after the medical group cut its 2018 sales and income outlook due to the under-performance of its U.S. business. 

On Wall Street, stocks fell at the open as volatile trading continued through the start of the earnings season.

Brexit talks

Investors are also monitoring a crunch EU summit in Belgium later. U.K. Prime Minister Theresa May is likely to urge other EU leaders to give ground on the issue of the Irish border when she address them in Brussels on Wednesday.

The post-Brexit status of the Irish border remains a sticking point for negotiators, with both sides unable to agree on how to avoid a so-called hard border when Britain leaves the EU on 29 March next year. Ahead of the summit, European Council President Donald Tusk said there were "no grounds for optimism" over a Brexit deal.

Italy Budget 

Italy's FTSE MIB index closed provisionally 1.33 percent lower. 

Italy's government submitted a draft budget just before the deadline late on Monday night. The country's populist and partly right-wing coalition wants to increase the country's deficit to 2.4 percent of annual economic output in 2019, as it looks to make good on pre-election spending pledges.

However stocks and bonds sold off Wednesday afternoon after a key EU official said Brussels is 'very likely' to reject the Italian budget.