European Markets Finished Mostly Lower

(RTTNews) - The European markets ended Tuesday's session with mixed results, although there was more red than green in the region. China concerns remain after yesterday's disappointing GDP report, but the focus of investors is on the central banks. The European Central Bank will hold its policy meeting on Wednesday and Thursday in Malta.

Lending conditions for businesses eased further in the third quarter, while those for house purchases tightened, results of a survey by the European Central Bank showed Tuesday.

Credit conditions on consumer credit and other lending to households also eased in the third quarter, the ECB's quarterly Bank Lending Survey revealed. Competition was the main driver of banks' easing of credit standards for loans to enterprises, the survey said.

The Bank of England should consider to begin interest rate hikes now if it wants to proceed with the tightening cycle only gradually to reduce the impact on households and businesses, policymaker Ian McCafferty said on Tuesday.

"If we on the MPC are to achieve our ambition of raising rates only gradually, so as to minimize the disruption to households and businesses of a normalization of policy after a long period in which interest rates have been at historic lows, we need to avoid getting 'behind the curve' with respect to the neutral rate," McCafferty said in a speech delivered at the Bloomberg headquarters in London.

"And for me, that provides an additional justification not to leave the start date for lift off too late."

The policymaker is the only member of the BoE Monetary Policy Committee seeking a rate hike. He has sought a quarter-point rate increase since August.

Meanwhile, other policymakers including Governor Mark Carney have signaled that it is time to think of raising rates, they are apparently not in a hurry amid the persistently low inflation.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.50 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.64 percent.

The DAX of Germany declined 0.16 percent and the CAC 40 of France fell 0.64 percent. The FTSE of the U.K. dropped 0.11 percent and the SMI of Switzerland finished lower by 0.64 percent.

In Frankfurt, Volkswagen slipped 0.49 percent. A recent survey by market-research firm Prophet found that two-thirds of Germans still believe Volkswagen builds "outstanding" cars despite the massive emissions-test cheating scandal.

Deutsche Bank fell 1.39 percent. The lender paid $6 billion to a U.S. hedge fund client by mistake in a "fat finger" trade on its foreign exchange desk this summer, the Financial Times reported.

SAP rose 0.53 percent. The business software maker said its newer Internet-based cloud business could top full-year targets in the fourth quarter.

Manz climbed 5.69 percent, after it signed a cooperation agreement with adidas AG in connection with the adidas "Speedfactory" initiative.

In London, hotel and catering group Whitbread gained 3.32 percent after its profit rose 14 percent in the first half, beating expectations.

InterContinental Hotels Group surged 6.92 percent, after its third-quarter comparable RevPAR went up 4.8 percent.

Inmarsat increased 3.52 percent, after it signed a 10-year connectivity services contract with Lufthansa.

Actelion rose 3.67 percent in Zurich, after it reported 9-month results.

Eurozone's current account surplus decreased sharply in August, figures from the European Central Bank showed Tuesday. The current accounts surplus declined to an unadjusted EUR 17.7 billion from EUR 25.6 billion in July. A year ago, the surplus was EUR 17.4 billion.

Germany's producer prices declined at the fastest pace in seven months and the fall was much worse than the decrease economists had predicted, preliminary data from Destatis revealed Tuesday. The industrial producer price index dropped 2.1 percent year-on-year following a 1.7 percent slump in August. Economists had expected a 1.8 percent fall.

The leading index for France, which measures the future economic activity, increased at a stable pace in August, survey figures from the Conference Board showed Monday. The Conference Board leading economic index climbed 0.4 percent in August, the same rate of increase as in July. In June, the index had risen 0.3 percent.

Housing starts in the U.S. rose more than expected in the month of September, according to a report released by the Commerce Department on Tuesday.

The report said housing starts climbed 6.5 percent to an annual rate of 1.206 million in September from the revised August estimate of 1.132 million. Economists had expected housing starts to rise to a rate of 1.147 million.

Meanwhile, building permits tumbled 5.0 percent to an annual rate of 1.103 million in September from 1.161 million in August. Building permits, an indicator of future housing demand, had been expected to come in unchanged compared to the 1.170 million originally reported for the previous month.