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European markets close lower as investors digest U.S. inflation data, eye Fed meeting

Elliot Smith
Holly Ellyatt

This is CNBC's live blog covering European markets.

European markets fell on Tuesday as global investors digested the latest U.S. inflation reading and eyed the start of the Federal Reserve policy meeting.

European markets


The pan-European Stoxx 600 provisionally closed 0.23% lower, with the oil and gas sector losing 1.28%.

Meanwhile in the U.S., the closely-watched consumer price index rose 0.1% in November and 3.1% from a year ago. Economists had been expecting no gain and a yearly rate of 3.1%, according to a Dow Jones survey.

The data comes as the U.S. Federal Reserve kicks off its two-day meeting, where it will mull over its latest interest rate policy and issue economic projections.

Asia-Pacific markets edged higher Tuesday, with Japan stocks leading gains for a second straight session. U.S. stocks were higher in morning trade after the inflation data.

Europe stocks close lower

European stocks closed lower Tuesday, with the Stoxx 600 index dipping 0.23%.

Major bourses finished in the red, with France's CAC 40 down 0.11% and the U.K.'s FTSE 100 and Germany's DAX slightly below the flatline.

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Stoxx 600 index.

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European stocks give back slight gains

European markets gave back the morning's cautious gains by noon to hover just below the flatline.

The pan-European Stoxx 600 was down 0.1% with telecoms shedding 0.7% to lead losses while media stocks added 0.5%.

UK wage growth slows as labor market cools

A couple look at the job vacancies on offer in the window of the Reed employment agency in London, England.
Oli Scarff | Getty Images News | Getty Images

U.K. regular wages grew at an annual 7.3% in November, down from 7.8% the previous month — welcome news for the Bank of England ahead of its monetary policy decision on Thursday.

Job vacancies fell once again in the three months to the end of November and are now down 27% from their peak, though remain above pre-pandemic levels, while the unemployment rate was stable at 4.2%.

Stuart Cole, chief macro economist at Equiti Capital, said the latest round of data was good news for the central bank in its battle to bring inflation sustainably back to its 2% target, but the labor market remained "too strong overall to suggest that monetary policy will start to be eased any time soon."

"With the growth figures to be published tomorrow expected to show output falling by 0.1% in October and core annual CPI still nearly three times above target, the pulls on monetary policy continue to be coming from opposite directions," Cole said in an email.

"Overall it likely leaves the BoE at this week's meeting in something of an impasse, forced to continue resisting pressure to lower rates in support of a slowing economy and choosing instead to keep policy tight as it struggles to bring CPI and wages growth back under control."

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Shares of Carl Zeiss Meditec climbed more than 8% in early trade after the German medical technology company beat annual revenue expectations and offered a more positive 2023/24 outlook than the market was expecting.

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A lukewarm open in Europe

European stocks made a muted start to Tuesday's session.

The pan-European Stoxx 600 was up 0.1% in early trade, with household goods adding 0.6% to lead gains while telecoms fell 0.9%.

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European markets: Here are the opening calls

European markets are expected to open in negative territory Tuesday.

The U.K.'s FTSE 100 index is expected to open 17 points lower at 8,393, Germany's DAX down 18 points at 18,718, France's CAC 5 points lower at 8,199 and Italy's FTSE MIB down 31 points at 34,451, according to data from IG.

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