European Stocks Close Broadly Lower Ahead Of Interest Rate Moves

(RTTNews) - European stocks closed broadly lower on Tuesday as the mood remained cautious and investors largely refrained from indulging in any significant buying ahead of interest rate decisions from the Federal Reserve, the Bank of England and the European Central Bank.

The Fed is widely expected to raise interest rate by 25 basis points. The focus will be on the accompanying statement for clues about the outlook for further rate hikes.

Investors digested the latest batch of economic data and earnings updates for direction.

Weak retail sales data from Germany, slower pace of economic expansion in France, and the IMF's report that the British economy will shrink by 0.6% in 2023 weighed on sentiment.

The pan European Stoxx 600 ended 0.26% down. The U.K.'s FTSE 100 drifted down 0.17%, while Germany's DAX and France's CAC 40 both edged up slightly. Switzerland's SMI ended 0.82% down.

Among other markets in Europe, Austria, Belgium, Poland, Portugal and Russia closed higher.

Czech Republic, Denmark, Finland, Greece, Ireland, Spain and Turkiye ended weak, while Netherlands, Norway and Sweden settled flat.

In the UK market, Johnson Matthey rallied more than 4%. Diageo gained 3.2%. Compass Group, Haleon and Coca-Cola HBC gained 1 to 1.3%.

Ocado Group ended 5.3% down. Rolls-Royce Holdings, BT Group, M&G, Weir Group, Fresnillo, United Utilities, Smiths Group, Anglo American Plc, Rentokil Initial, Glencore, Melrose Industries, Standard Chartered and AstraZeneca lost 1 to 3%.

In Paris, ArcelorMittal, Saint Gobain, Alstom, TotalEnergies, Thales, Air Liquide, Vivendi and STMicroElectronics lost 1 to 2%.

Societe Generale, Stellantis and Pernod Ricard gained 2 to 2.6%. Dassault Systemes, Renault, Essilor, Michelin and BNP Paribas advanced 1 to 1.5%.

In the German market, BMW surged 1.8%. Porsche gained about 1.5% and SAP advanced 1.05%.

Fresenius Medical Care, Sartorius, Merck, Fresenius, BASF, Daimler and Allianz ended notably lower.

The IMF said the British economy will shrink by 0.6% in 2023, rather than grow slightly as previously predicted, reflecting high energy prices and factors such as high inflation.

The euro area economy posted an unexpected expansion in the fourth quarter, preliminary flash estimates released by Eurostat showed on Tuesday. Gross domestic product grew 0.1% sequentially after rising 0.3% in the third quarter. Economists had forecast the currency bloc to shrink 0.1%.

Official data released earlier today showed that French economic expansion slowed in the fourth quarter of 2022, in line with economists' expectations.

GDP grew 0.1% quarter-on-quarter following a 0.2% increase in the third quarter due to a slump in domestic demand that was led by a steep fall in household consumption and weaker investments.

This was the worst outcome since the first quarter of 2022, when the economy contracted 0.2 percent.

Earlier today, the International Monetary Fund retained France's growth forecast for this year at 0.7 percent and raised the estimate for 2022 to 2.6% from 2.5%. The lender projected 1.6% growth for next year.

German retail sales plunged 6.4% in December from last year, much sharper than economists' forecast of -1.8%, data published by Destatis showed suggesting weak consumer spending even during the Christmas season.

On a monthly basis, retail turnover decreased 5.3%, in contrast to the 1.9% increase in November and the 0.2% rise economists had forecast.

Separate data showed import prices logged a double-digit annual growth of 12.6% in December, slower than the 14.5% surge in November. Economists had forecast inflation to ease to 12%.

Switzerland's retail sales decreased for a third month in row in December, and at the fastest pace since April, despite Christmas holidays as households cut back on spending amid high inflation, preliminary data from the Federal Statistical Office showed. Total retail sales decreased 2.8% year-on-year following a revised 1.4% slump in November.