European Markets Close Weak Amid Interest Rate Uncertainty

(RTTNews) - European stocks closed lower on Tuesday with investors, back to trading after a long weekend, pressing sales at several counters amid renewed uncertainty about the outlook for U.S. interest rates after recent data showing a bigger than expected increase in consumer price growth, and an improvement in U.S. manufacturing activity in March.

Investors also digested the latest batch of economic data from the region.

The pan European Stoxx 600 fell 0.8%. The U.K.'s FTSE 100 ended down 0.22%, Germany's DAX ended lower by 1.13% and France's CAC 40 dropped 0.92%, while Switzerland's SMI settled lower by 1.15%.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Spain, Sweden and Turkiye ended weak.

Norway, Portugal and Russia closed lower, while Austria, Netherlands and Poland ended flat.

In the UK market, Entain, Reckitt Benckiser, Burberry Group, Ocado Group, RightMove, Bunzl, EasyJet and Compass Group ended lower by 3 to 5%.

Land Securities, Unite Group, Scottish Mortgage, Persimmon, Segro, Taylor Wimpey, Howden Joinery, GSK, WPP, Barratt Developments, Diploma, Haleon, RS Group and Rolls Royce Holdings lost 2 to 3%.

Fresnillo climbed more than 7%. Anglo American Plc rallied nearly 5%. Royal Dutch Shell, Glencore, BP, Convatec Group and Rio Tinto gained 2 to 3.5%. Antofagasta, Beazley and Diageo also ended notably higher.

In the German market, Vonovia, Merck, Sartorius and Zalando lost 3 to 3.7%. HeidelbergCement, Infineon, Adidas, Fresenius Medical Care, Beiersdorf, SAP, Deutsche Post, Puma, Fresenius, Bayer, Allianz, Hannover Rueck and Siemens Healthineers also declined sharply.

Siemens Energy, BASF and Henkel posted strong gains.

In Paris, Stellantis, Sanofi, Legrand, Dassault Systemes, Schneider Electric, STMicroElectronics and Safran lost 2.2 to 3.3%. Airbus Group, L'Oreal, Capgemini, Danone, LVMH, Pernod Ricard, Michelin, Vinci and Publicis Groupe also ended notably lower.

TotalEnergies climbed nearly 4%. Eurofins Scientific and Renault both gained more than 1.5%. WorldLine, Carrefour, Engie and Credit Agricole posted modest gains.

Data released by the Commerce Department on Friday showed the annual rate of consumer price growth ticked up to 2.5% in February from 2.4% in January, in line with estimates.

Meanwhile, the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.8% in February from an upwardly revised 2.9% in January. Economists had expected the pace of core price growth to come in unchanged compared to the 2.8% originally reported for the previous month.

After the inflation data, Fed Chair Jerome Powell said that the central bank will not overreact to the data, suggesting the bank is content to remain in wait-and-watch mode.

In economic news from Europe, consumer price inflation in Germany slowed for a third straight month in March to its lowest level in nearly three years but core inflation remained high, thus complicating the picture for the European Central Bank that is set to announce the latest rate decision next week and is facing calls for an interest rate cut, possibly in June.

The consumer price index rose 2.2% year-on-year following a 2.5% increase in February, preliminary figures from the statistical office Destatis showed. Core inflation, which excludes prices of food and energy, eased slightly to 3.3% from 3.4%.

The CPI rose 0.4% from February, the same pace as in February. Economists had forecast a 0.5% gain.

The euro area manufacturing activity shrunk the most in three months in March despite signs of positive momentum building in output, new orders and business sentiment, a survey compiled by HCOB and S&P Global showed.

The final manufacturing Purchasing Managers' Index fell to a three-month low of 46.1 in March from 46.5 in February. At 45.7, the flash reading was even weaker.

UK house prices declined unexpectedly in March as higher interest rates continue to damp affordability, data published by the Nationwide Building Society revealed. The house price index posted a monthly fall of 0.2% in March, in contrast to the 0.7% rise in February and confounding the forecast of 0.3% gain.

British factory activity showed tentative signs of recovery in March as output and new orders recovered, survey results from S&P Global revealed Tuesday.

The seasonally adjusted Manufacturing Purchasing Managers' Index, or PMI, rose to a 20-month high of 50.3 in March from 47.5 in February. The flash score was 49.9. A reading below 50 indicates expansion in the sector.