European markets close lower, Fed rate hike eyed

European markets closed lower Tuesday as investors digested fresh economic data and eyed a probable interest rate hike in the U.S. later this month.

The pan-European Stoxx 600 closed 0.27 percent lower provisionally with utility stocks among the worst performers on rating revisions.

E.ON U.K. said it will be raising its standard variable dual-fuel prices by 8.8 percent from April, highlighting that the increase is needed due to the escalating costs of government schemes, according to Reuters. Shares slipped 2.2 percent.

Meanwhile, autos led the gains, finishing higher by 0.55 percent, on comments from carmakers that Peugeot’s purchase of Opel would not impact the landscape for the industry.

Just Eat was the best performing stock on Tuesday, up by 4.6 percent, after reporting a 0.5 percent increase in revenue and a doubling in pre-tax profits.

Software AG was also among the best performers, up by nearly 2.7 percent, after announcing a buyback of its own shares of up to 100 million euros.

Intertek shares also rose 4.7 percent on amid earnings beat.

By contrast shares of temporary-power provider Aggreko were down by 12.9 percent after posting three percent-decline in full-year underlying revenue.

Meanwhile, in the U.S., the Dow Jones industrial average and broader S&P 500 continued slightly lower as investors sought fresh clues on monetary policy.

Elsewhere, investor expectations for a rate hike announcement in the U.S. next week stood at 86.4 percent on Tuesday morning, the CME Group’s FedWatch tool showed.

Investors also continue to closely follow political events across Europe, where uncertainty has dominated in recent months ahead of a slew of elections.

An Ifop Fiducial poll showed the centrist candidate to the French election, Emmanuel Macron, closing the gap on far-right leader Marine Le Pen in the first round of the vote.

However, polling numbers continue to suggest that Le Pen will lose the second runoff to Macron.

In the U.K., the House of Lords is to vote on further amendments to the government’s Brexit bill on Tuesday.

In terms of data, U.K. house price growth cooled to its weakest level since 2013, mortgage lender Halifax said. Elsewhere, German industrial orders dropped by 7.4 percent in January, the biggest fall since 2009.

The OECD estimated in its latest economic outlook a global growth rate of 3.5 percent but warned political uncertainty and protectionism could undermine growth.

Later in the session on Tuesday, there will be the release of the latest Red Book in the U.S. which highlights retail sales in the country.

Source: CNBC

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