Europe Markets

European stocks close lower amid momentum in global markets; Aveva up 7%

Key Points
  • The pan-European Stoxx 600 index provisionally closed down by almost 0.2%, with most sectors slipping into negative territory.
  • Stateside, the S&P 500 hit another record high while the Nasdaq also climbed, but the Dow slipped about 140 points.
  • Germany released second-quarter GDP data that showed its economy shrank by 9.7% from the previous year.

European stocks closed slightly lower on Tuesday, reversing earlier gains as investors tracked U.S.-China trade talks and the latest moves in global markets.

The pan-European Stoxx 600 index provisionally closed down by almost 0.2%, with most sectors slipping into negative territory. Oil and gas stocks led the losses to slip 1.3%, while travel and leisure stocks were the top performers, up about 1.5%.

The S&P 500 on Monday touched another record high on Wall Street, having closed above 3,400 for the first time. Apple also hit an all-time high, leading other tech names higher, while airline and cruise operator stocks jumped amid enthusiasm on the coronavirus front.

On Tuesday, the S&P 500 once again rose to a fresh record while the Nasdaq also climbed, but the Dow Jones Industrial Average slipped about 140 points.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had a call with Chinese Vice Premier Liu He to "discuss implementation of the historic Phase One Agreement between the United States and China," according to a USTR statement released Monday evening stateside.

According to the USTR: "Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement."

Markets are also following developments in the coronavirus pandemic. Scientists and public health officials said Monday they are skeptical convalescent plasma is an effective treatment for patients hospitalized with Covid-19, even after the Food and Drug Administration issued an emergency use authorization for the treatment and President Donald Trump touted it as a "breakthrough."

Corporate news

Looking at individual stocks, Aveva Group rose to the top of the pan-European benchmark after announcing a deal to buy SoftBank-backed U.S. software firm OSIsoft for $5 billion. The stock was up more than 7% on the news.

Travel and leisure shares were among the biggest gainers, despite earnings from Scandinavian Airlines System that showed the airline swung to a loss in the fiscal third quarter. French hospitality group Accor and British gambling firm GVC Holdings were the top gainers in the sector, both rising over 4%.

In the French market, LVMH traded almost 2% higher in afternoon deals. Reuters reported citing one source that the luxury brand agreed to give another three months to complete a tie-up with Tiffany

On the data front, Germany released more detailed information on its second-quarter growth data that showed its economy shrank by 9.7% from the previous three month period. 

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What's the future for the German economy?

Finally, traders are also looking ahead to an upcoming speech by the Federal Reserve Chairman, Jerome Powell, on Thursday. He will speak during a virtual version of the Fed's annual Jackson Hole, Wyoming, conference and is expected to outline what could be the central bank's most active efforts ever to spur inflation back to a healthy level.

— CNBC.com contributed to this market report.