European stocks ended Tuesday significantly lower, driven by renewed concerns over global economic growth and uncertainty regarding the Federal Reserve's timeline for interest rate reductions following mixed economic indicators.
Investors processed a variety of regional economic data and a report on U.S. manufacturing activity while anticipating remarks from European Central Bank policymakers.
Sharp declines were observed in energy and mining sectors due to weak commodity prices.
The pan-European Stoxx 600 declined 0.97%. The UK's FTSE 100 dropped 0.78%, Germany's DAX fell 0.97%, France's CAC 40 decreased by 0.93%, and Switzerland's SMI slipped 0.83%.
Other European markets, including Austria, Belgium, Denmark, Finland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, and Turkey, experienced notable to moderate losses. Denmark and Iceland recorded modest declines, whereas Greece remained flat.
In the UK market, Rightmove plummeted by 6.8%, and Fresnillo slid 5.6%. Companies like Anglo American Plc, Antofagasta, Melrose Industries, Glencore, BP, Endeavour Mining, Shell, Natwest Group, Pershing Square Holdings, Standard Chartered, Rio Tinto, and Mondi fell between 2% and 5%.
Conversely, Easyjet rose approximately 2.75%. B&M European Value Retail, Tesco, Reckitt Benckiser, IAG, Severn Trent, and Intertek Group gained between 1% and 2.2%.
Ashtead gained around 1% after maintaining its annual profit outlook, while Rolls-Royce Holdings advanced nearly 2% following a statement from Hong Kong airline Cathay Pacific that issues with Rolls-Royce's Trent XWB-97 engines could be resolved by September 7.
In Germany, Infineon declined by 4.6%. Porsche, Daimler Truck Holding, Siemens Energy, Commerzbank, and BASF lost between 2.3% and 3.2%.
HeidelbergCement, BMW, Deutsche Bank, Mercedes-Benz, Qiagen, Rheinmetall, Siemens, Volkswagen, and Vonovia each ended down by 1% to 2%.
Symrise climbed approximately 1.5%, and Hannover Rueck, Zalando, Puma, Beiersdorf, and Henkel reported modest gains.
In France, ArcelorMittal, STMicroelectronics, and TotalEnergies closed down by 5.1%, 4.6%, and 3.1%, respectively.
Companies like Stellantis, Renault, Saint Gobain, Legrand, Airbus Group, Pernod Ricard, Dassault Systemes, Schneider Electric, Safran, Publicis Groupe, BNP Paribas, and Societe Generale fell between 1.3% and 3%.
Teleperformance surged by about 2.5%, with Carrefour and Danone also showing notable gains.
On the economic front, UK retail sales rose in August, driven by food sales, according to the British Retail Consortium. Total retail sales grew 1% year-on-year in August, albeit slower than the 4.1% growth recorded in the same period last year. However, this was an improvement compared to the three-month average growth of 0.4%.
Switzerland's economic growth accelerated in the second quarter, as initially estimated, supported by strengthening manufacturing and service sectors, according to the State Secretariat for Economic Affairs (SECO). GDP grew 0.5% sequentially, matching the flash estimate and surpassing the 0.3% growth of the previous two quarters.
Moreover, Switzerland's consumer price inflation eased more than expected in August, reaching the lowest level in five months, as reported by the Federal Statistical Office. The consumer price index rose by 1.1% year-on-year in August, slower than the 1.3% rise in July and below the expected 1.2%. This was the lowest inflation rate since March when prices increased by 1%.
In the U.S., the Institute for Supply Management reported a continued contraction in manufacturing activity for August. The manufacturing PMI inched up to 47.2 from July's 46.8, but remained below 50, indicating ongoing contraction. Economists had predicted the index would rise to 47.5.
