FX.co ★ European Stocks Close Lower After Cautious Session

European stocks finished trading lower on Tuesday as investors scrutinized fresh earnings and economic updates and anticipated the Federal Reserve's monetary policy announcement scheduled for Wednesday. It is broadly anticipated that the Federal Reserve will leave the interest rate unaltered, with investors' attention focusing on the accompanying statement and Chair Jerome Powell's press conference. The market is now expecting a rate cut to be announced in September.

Across Europe, the Stoxx 600 declined by 0.68%. The UK's FTSE 100 slightly dipped by 0.04%, and Germany's DAX and France's CAC 40 posted decreases of 1.03% and 0.99% respectively. The Swiss SMI also fell by 0.63%. Various other European markets, including Austria, Belgium, Finland, Greece, Netherlands, Poland, Portugal, Russia, Spain, Sweden, and Turkey, also exhibited weakness. However, Denmark, Iceland, and Norway experienced stock market gains.

In the UK, mining firm Fresnillo and international financial services group Prudential, experienced a drop of roughly 5.5%. Prudential's downturn followed an announcement that its China-based venture CITIC Prudential Life had seen its annual premium equivalent sales fall by 17% in the first quarter. Other notable losses included multinational mining company Anglo American at 4.2%, and companies such as Entain, Vodafone Group, Antofagasta, Centrica, Taylor Wimpey, Ashtead Group, and St. James's Place which lost between 2% and 4%.

On a positive note, HSBC Holdings saw a rise of over 4% after it announced plans to repurchase $3 billion additional shares. Hargreaves Lansdown, a financial services company, saw a 3.6% gain with asset under management levels rising by £7.5 billion to a record £149.7 billion between January to March.

Germany's stock market was affected by the luxury carmaker Mercedes-Benz reporting a 30% annual fall in first-quarter earnings, triggering a share price drop of over 5%. Volkswagen also announced a 20% drop in operating profit in the first quarter, compared to the same period last year.

In France, companies such as Renault, Bouygues, AXA, and Teleperformance saw losses between 4.4% and 5.5%. In contrast, pharmaceutical company Sanofi saw a modest gain of about 1.4%.

In the broader economic landscape, preliminary projections from Eurostat revealed that the euro area economy grew in the first quarter following two consecutive declines, with the GDP growing by a higher-than-expected 0.3% quarter on quarter. Similar trends were seen in the German economy where the GDP grew by more than expected 0.2% sequentially in the first quarter. Finally, headline inflation in the euro area was in line with expectations at 2.4% in April.