Europe close: Stocks end on mixed note, analysts as well

European stocks ended on a mixed note but off their worst levels of the session on the back of a dip in the euro's value as recent buying in the US dollar continues, although City traders were cautious.

By the closing bell, the benchmark Stoxx 600 was down by 0.19% or 0.73 points to 386.74, alongside a dip of 0.08% or 10.01 points to 13,048.54 for the German Dax.

The Cac-40 also finished lower, retreating by 0.26% or 13.76 points to 5,375.53, although Milan's FTSE Mibtel gained 0.24% or 54.20 points to 22,416.31.

In parallel, euro/dollar was down by 0.51% to 1.1807.

"The DAX and CAC 40 are in the red as traders are still a bit nervy when it comes to the Continental markets. The German and French equity markets have been subdued for the past couple of weeks. Traders can’t seem to make up their mind whether to buy back into the market, or cash in their positions before year-end," said David Madden at CMC Markets UK.

On a related note, but on the subject of global markets, Michael Hartnett, head of Global Investment Strategy at Bank of America-Merrill Lynch, said: "Our overall outlook for the year ahead is macro bullish, so much so that we’re ultimately market bearish.

"Investors are chasing growth and high-yielding assets in a bull market that’s been driven and enabled by central bank liquidity. We see an end to this Icarus trade and an aggressive downgrade of risk assets once profits peak, investor positioning becomes excessively enthusiastic and central banks start withdrawing liquidity as they scale back support."

Nevertheless, BofA's 2018 target for the Stoxx 600 specifically was 430 points.

Commenting on the outlook for European equities, BofA-ML added: "2017 has been unusually benign with the lowest daily price volatility, narrowest price range and sixth smallest drawdown in 30 years. We are in the fourth longest rally with no 10% correction since 1987. Volatility / corrections are more likely in 2018. Potential drivers include QE flows turning negative, higher bond yields and possibly inflation, macro data maxing out, credit market excesses unwinding or China/geopolitics tail risks."

Economic data out on Tuesday revealed that the euro area's service sector continued to be in rude health, with IHS Markit's purchasing managers' index for November printing at 56.2, up from a reading of 55.0 in October, which was in-line with a preliminary estimate.

However, according to Eurostat Eurozone retail sales volumes plummeted by 1.1% month-on-month in October (consensus: -0.7%).

Spanish industrial production for October on the other hand surprised to the upside, with figures from the country's national statistics office, INE, showing growth of 0.6% versus September (consensus: 0.4%) and of 4.1% in comparison to the year-earlier level.

Later in the day, at 1330 GMT the US Department of Commerce was set to release its foreign trade numbers for the month of October, followed by the ISM Institute's service sector purchasing managers' index for November at 1500 GMT.

On the corporate front, Thyssenkrupp chairman Ulrich Lehner rejected calls from some investors for a break-up of the group, Handelsblatt reported.

In France, Carrefour and FNAC Darty unveiled a purchasing alliance for white goods and consumer electronics.

Elsewhere, Natixis reportedly said it was aiming to boost Asia's share of its corporate and investment banking sales to over 15% in the new few years.