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European Markets Close Notably Lower On Trade Uncertainty, Weak Earnings

European markets ended mostly lower on Tuesday, weighed down by uncertainty about U.S.-China trade deal and some disappointing quarterly earnings reports.

Rising possibilities of the U.K. leaving the European Union without a deal weighed as well. Investors were also looking ahead to the Federal Reserve's monetary policy statement, due on Wednesday.

The pan European Stoxx 600 declined 1.47%. Among the major indices, Germany's DAX tumbled 2.18%, France's CAC 40 declined 1.61% and the U.K.'s FTSE 100 shed 0.52%. Switzerland's SMI ended 0.8% down.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey ended with sharp to moderate losses.

In Germany, Lufthansa ended nearly 6% down on disappointing results. Bayer too declined sharply on weak results.

Fresenius closed lower by about 5%. Adidas, HeidelbergCement, Deutsche Post, BASF, Continental, E.ON, Infineon, Daimler, Deutsche Bank, SAP and Merck lost 2.5 to 4%.

Allianz, BMW, Deutsche Telekom, Wirecard, Siemens and Linde also declined sharply.

In the French market, Societe Generale and Saint Gobain both ended lower by more than 3.5%, while Peugeot declined 3.4%.

ArcelorMittal, Carrefour, Credit Agricole, Publicis Groupe, BNP Paribas, Bouygues, Sodexo, Michelin, Vinci, STMicroElectronics, Renault, AXA and Accor also declined sharply.

Capegemini bucked the trend and ended stronger by over 2.5% after reporting a 23% jump in first-half net profit.

In the U.K. market, Centrica plunged nearly 20% after slashing dividend and announcing the departure of its chief executive.

Fresnillo ended lower by about 17.7% after its first-half profit fell by more than two-thirds.

EasyJet, IAG, Imperial Brands, British American Tobacco, RBS and Just Eat lost 3 to 6%. Reckitt Benckiser lost nearly 3% after lowing its earnings outlook for FY19.

BP ended stronger by about 3% on stronger than expected second-quarter earnings.

Micro Focus gained 2.1%. Taylor Wimpey, Diageo and Rio Tinto also ended on a firm note, albeit with less pronounced gains.

Russia edged up marginally, while Iceland and Ukraine ended flat.

In economic releases, Eurozone economic confidence weakened to the lowest since March 2016, reflecting weakness across industry, services, retail trade and construction, survey results from European Commission showed.

The economic confidence index fell to 102.7 in July from 103.3 in June. This was the lowest since March 2016, when the reading was 102.3.

Germany's consumer confidence is set to fall in August on fears of a recession, survey data from the market research group GfK showed.

The forward-looking consumer sentiment index came in at 9.7 in August versus 9.8 in July. This was the third decline in succession and the lowest since April 2017.

French GDP grew 0.2% sequentially in the second quarter, slower than the 0.3% expansion seen in the first quarter, data from the statistical office Insee showed. The growth rate was forecast to remain unchanged at 0.3%.

Meanwhile, uncertainty about any quick solution to the trade deal has resurfaced after Trump lashed out at China in a series of posts on Twitter.

Trump claimed there are "no signs" that China is following through on plans to purchase U.S. agricultural products and suggested the Chinese are hoping to wait out the U.S. presidential election to get a better deal.

"China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so," Trump tweeted.

"That is the problem with China, they just don't come through," he added. "My team is negotiating with them now, but they always change the deal in the end to their benefit."

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Inflation data from the U.S. garnered maximum attention this week on the economics front, along with the interest rate decision by the European Central Bank. Read our stories to find out how these two key events are set to influence monetary policy in the months ahead. Other main news from the U.S. were the release of the minutes of the latest Fed policy session and the jobless claims data. Elsewhere, the interest rate decision by the Bank of Canada was also in focus.

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