City of London skyline on 10th June 2024 in London, United Kingdom. The City of London is a city, ceremonial county and local government district that contains the primary central business district CBD of London.
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LONDON — European stocks closed lower on Tuesday, following a more positive session at the start of the week.
The pan-European Stoxx 600 provisionally ended down 0.5%, with most sectors and major bourses in negative territory. The U.K.’s FTSE 100 closed 0.7% lower, reversing gains after closing 1.09% higher in the previous session.
Autos fell 3.8% as car parts supplier Continental said it saw provisions in the mid double-digit million euro range in a warranty case involving one of its brake systems, Reuters reported. BMW on Tuesday trimmed its 2024 profit margin guidance, citing issues with Continental’s brake systems as well as other factors. BMW shares were down 11% while Continental slid more than 10%.
Elsewhere, health care fell 0.6%, dragged lower by AstraZeneca. The British pharmaceutical giant fell as much as 5% at one point on Tuesday after it announced disappointing lung cancer drug trial results.
The more downbeat picture for European stocks Tuesday comes after regional markets closed higher on Monday, shrugging off last week’s negative sentiment.
There was positive sentiment in Asia-Pacific markets overnight, following gains on Wall Street that saw both the S&P 500 and Nasdaq Composite rebound from their worst week of the year.
Stateside, stocks wobbled on Tuesday as markets struggled to find their footing in September.
Investors are largely looking ahead to next week’s meeting of the U.S. Federal Reserve where an interest rate cut is widely anticipated. There are hopes a cut at the meeting on Sept. 17-18 will assuage concerns about a weakening economy.
Back in Europe, U.K. unemployment eased to 4.1% in May to July, while annual growth in regular employee earnings fell to 5.1% over the same period, data from the Office for National Statistics showed.
Richard Carter, head of fixed interest research at Quilter Cheviot, said the persistence of wage growth could give the Bank of England pause for thought when it meets to make its policy decision next week.
“Though wage growth is coming down, it remains significantly higher than the Bank’s 2% inflation target. In real terms, average regular earnings are rising by 2.9%. While this may help buoy consumer confidence, it will still be of some concern to the BoE,” Carter said in a note.