By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets traded mostly lower on Tuesday, spurred by weakness in the banking and commodity sectors, while investors also assessed the latest round of earnings reports from prominent firms such as Vodafone Group PLC and Infineon Technologies AG.
The Stoxx Europe 600 index XX:SXXP -0.71% fell 0.5% to 321.83, retreating from the highest closing level since May 2008, reached on Monday.
Banks were among major losers, with shares of Royal Bank of Scotland Group PLC UK:RBS -2.71% RBS -2.69% down 2.2% and Svenska Handelsbanken AB SE:SHBA -1.23% off 0.8%.
Shares of Infineon Technologies DE:IFX -4.99% dropped 3.8% in Frankfurt after the chip maker reported fourth-quarter revenue slightly below expectations.
Norsk Hydro ASA NO:NHY -5.64% slid 5.8% after the aluminum company said Brazilian miner Vale SA VALE -0.19% has sold its stake in the Norwegian firm.
On a more upbeat note, Vodafone Group UK:VOD +0.69% VOD +0.41% gained 1.7% after the wireless-telecoms giant said it swung to profit in the first half of the fiscal year. However, revenue for its existing services business declined in the second quarter.
Shares of TalkTalk Telecom Group PLC UK:TALK +8.52% rallied 9.9% after the TV and telecoms firm raised its full-year revenue-growth guidance to at least 3% from 2%.
Swiss Life Holding AG CH:SLHN +5.78% jumped 6% after the insurance firm said its generated premium-income climbed 6% in local currencies in the first nine months of the year.
Among country-specific indexes, the U.K.’s FTSE 100 index UK:UKX -0.34% traded 0.2% lower at 6,712.22, after having pared losses on the back of softer-than-expected inflation data. The Office for National Statistics said consumer prices rose 2.2% in October, down from 2.7% in September and lower than the 2.5% expected by analysts. A lower rate of inflation eases pressure on the central bank to tighten monetary policy.
“Inflation is under control which, will provide a fillip to heavily squeezed households and help the Bank of England maintain ultra-loose monetary policy to support the economy,” said Rob Wood, chief U.K. economist at Berenberg, in a note.
“Britain is slowly, but surely, getting past the worst of its troubles. Domestic price pressures are subdued, and we do not expect rapid consumer-price rises to deal the knockout blow to the Bank of England’s forward guidance,” he added.
The data came ahead of the Inflation Report from the BOE, due on Wednesday, which will be closely watched for any changes to inflation or unemployment forecasts. The central bank has said it won’t review its policy of keeping interest rates at a record low of 0.5% until the joblessness rate falls below 7%, which it doesn’t expect to happen before 2016.
The pound GBPUSD -0.54% dropped after the data, trading at $1.5876, down from late Monday’s $1.5991.
France’s CAC 40 index FR:PX1 -0.39% gave up 0.3% to 4,276.95. Germany’s DAX 30 index DX:DAX -0.32% slipped 0.3% to 9,082.80.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
