European Stocks Recover From Early Weakness, Close Broadly Higher

(RTTNews) - European stocks closed higher on Tuesday despite lingering uncertainty about the Trump administration's tariff moves.

Investors digested regional economic data, that included a report showing a drop in euro zone inflation, and looked ahead to some crucial reports from the U.S., including non-farm payroll data due later in the week.

The markets struggled a bit early on in the day, weighed down by a downward revision in UK's growth forecast by the Organization for Economic Co-operation and Development (OECD), and uncertainty surrounding the U.S. Government's tariff moves. The OECD also downgraded its global growth forecast.

The OECD downgraded the UK's growth forecast to 1.3% for 2025 and 1.0% for 2026 due to Trump's trade tariffs. The organization has slashed its global growth forecast to 2.9% from its earlier forecast of 3.1% for 2025.

The Paris-based firm said the outlook across the globe has become challenging with rising trade barriers and policy uncertainty, which is weighing on consumer confidence and blocking investments.

The pan European Stoxx 600 edged up 0.09%. The UK's FTSE 100 ended 0.15% up, Germany's DAX climbed 0.67% and France's CAC 40 ended higher by 0.34%. Switzerland's SMI also gained 0.34%.

Among other markets in Europe, Czech Republic, Greece, Ireland, Netherlands, Portugal, Russia, Sweden and Turkiye closed higher.

Austria, Belgium, Denmark, Finland, Poland and Spain ended weak, while Iceland and Norway closed flat.

In the UK market, Centrica rallied nearly 4.5%. Airtel Africa gained 3.15%, while Rolls-Royce Holding, Melrose Industries and Ashtead Group ended higher by about 3%, 2.7% and 2.6%, respectively.

British American Tobacco, the maker of Lucky Strike and Dunhill cigarettes, moved notably higher after raising its annual sales target.

Polar Capital Technology Trust, BAE Systems, SHELL and The Sage Group also closed with strong gains.

Pearson drifted down more than 6.5%. Rentokil Initial ended 3.4% down. Severn Trent, Haleon, GSK, Barratt Redrow, Persimmon, Endeavour Mining, Anglo American Plc, Marks & Spencer and BT Group also closed notably lower.

In the German market, Siemens Energy, SAP, BMW, Vonvoia, Infineon, Commerzbank, MTU Aero Engines, Mercedes-Bank, Brenntag, Deutsche Boerse and Daimler Truck Holding gained 1 to 2%.

Zalando ended nearly 4% down. Deutsche Boerse, Heidelberg Materials, Munich RE and Fresenius lost 1 to 1.6%.

In the French market, Orange and Teleperformance lost 3.8% and 3.2%, respectively.

STMicroElectronics gained more than 3%. Stellantis and Airbus gained 2.5% and 2.4%, respectively. Renault, Safran, Publicis Groupe, Saint Gobain and Sanofi also ended notably higher.

On the economic front, data showed France's government budget deficit narrowed to EUR 69.3 billion in April 2025 from EUR 91.6 billion in the corresponding period of the previous year. Total revenues climbed by 42% year-on-year to EUR 105.6 billion, while expenditures rose at a softer 3.2% to EUR 158.5 billion.

Flash data from Eurostat showed eurozone inflation eased more than expected in May largely due to the slowdown in services inflation.

Inflation softened to 1.9% in May, slightly below the central bank's target of 2%. Inflation was expected to slow to 2% from 2.2% in April.

Core inflation that strips out prices of energy, food, alcohol and tobacco, slowed unexpectedly to 2.3% from 2.7%. The rate was seen at 2.4%.

On a monthly basis, the harmonized index of consumer prices remained flat in May.

A separate data from Eurostat said the unemployment rate in the Euro Area edged down to 6.2% in April 2025, matching the record low set in December. The rate was down from a revised 6.3% in March.