Europe close: Stocks end on mixed note after Yellen

European stocks finished on a mixed note on Tuesday after data showed that the Eurozone economy grew less than expected in the final quarter of 2016 and US Federal Reserve chair Janet Yellen kept the door open to another interest rate hike, even at one of the central bank's next meetings.

The benchmark Stoxx Europe 600 index edged higher by 0.02% to 370.20, Germany’s DAX drifted lower by 0.02% at 11,771.81 and France’s CAC 40 was up 0.16% to 4,895.82.

Oil prices were a little firmer, with West Texas Intermediate up 0.69% to $53.30 per barrel and Brent crude jumping 0.89% to $56.09.

"Waiting too long to remove accommodation would be unwise," Janet Yellen said in prepared remarks for a speech before the US Senate Banking Committee.

"At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," she said.

Meanwhile, Eurozone gross domestic product rose 0.4% compared to the previous quarter, down from the 0.5% estimated back in January and in line with the third quarter figures. Analysts had expected 0.5% growth.

On the year, GDP grew by 1.7%, down from the 1.8% increase estimated last month and from the 1.8% rise in the third quarter. In the EU-28 group of nations, GDP rose by 0.5% on the quarter and 1.8% on the year.

Chris Williamson, chief business economist at IHS Markit, said: “Eurozone economic growth was revised down in the final quarter of last year, but the region still enjoyed a decent, steady pace of expansion that looks set to be sustained in the first quarter of 2017."

“However, there are clearly many risks to the outlook further ahead, notably including elections in the Netherlands, France, Germany and possibly Italy, as well as Brexit and Italy’s banking problems, all of which have the potential to create additional economic uncertainty and subdue growth. It therefore seems likely that the Eurozone will struggle to see 2017 GDP growth match the 1.7% expansion recorded in 2016.”

Eurozone industrial production fell 1.6% from November, which was a touch steeper than the 1.5% drop expected by economists. The production of capital goods declined by 3.3%, energy by 1.4%, non-durable consumer goods by 1.2% and intermediate goods by 0.2%, while production of durable consumer goods rose by 2.9%.

The German economy also grew less than expected in the fourth quarter. Gross domestic product rose 0.4% on the previous quarter on a seasonally-adjusted basis, missing economists’ expectations of 0.5% growth.

German investor sentiment deteriorated more than expected in February. The headline ZEW expectations index fell to 10.4 from 16.6 the month before, missing expectations for a reading of 15.0. The current situation index declined to 76.4 from 77.3 in January, undershooting analysts’ forecasts of 77.2.

In corporate news, engineering firm Rolls-Royce fell 3.31% after it posted a record annual loss of £4.6bn following a £671m corruption fine and amid the collapse of the pound.

HeidelbergCement was down 3.77% despite saying earnings and sales rose sharply in the fourth quarter.

On the upside, TUI advanced 1.74% as it reported a narrower loss for the first quarter.

Credit Suisse gained 2.30% ground despite reporting a bigger-than-expected loss for the fourth quarter following its settlement with US authorities, as it announced plans to cut 5,500 jobs.

Frozen baked goods maker Aryzta surged 11.53% after announcing a management shake-up and potential asset sales.