Europe close: Stocks hit by Brexit poll results

European stocks were sent lower on Tuesday as investors reacted with dismay to the results of two polls which appeared to point towards a shift in voters´ intentions in favour of the 'Leave' camp.

The benchmark DJ Stoxx Europe 600 index skidded 0.77% or 2.69 points into the close to finish at 347.45 while France’s CAC 40 ended the day 0.53% or 23.78 points lower to 4,505.62, alongside a fall of 0.68% or 70.49 points to 10,262.74 for Germany’s DAX.

Banks were clear underperformers on Tuesday, with the DJ Stoxx 600 sector gauge for lenders´ shares closing 1.64% or 2.54 points off at 152.71.

The lacklustre trading came at the start of a week that will see a number of important events such as the European Central Bank rate announcement and OPEC ministerial meeting on Thursday and the US non-farm payrolls report on Friday.

Oil prices on the other hand were slightly higher despite the restart of Canadian oilsands production. West Texas Intermediate was up 0.461% at $49.84 a barrel while Brent crude gained 0.34% to trade at $49.93.

Morgan Stanley said the OPEC meeting was unlikely to end in anything other than a statement of support for the current condition of oil markets.

“Renewed faith in the strategy and higher prices work against intervention, as do personnel changes and recent policy failures. Many OPEC members also have plans to grow, so cutting supply now may interfere with those objectives. That said, low expectations and limited positioning ahead of the meeting do suggest that any surprise could have an outsized impact,” the bank said.

Investors in the UK also got their first chance to react to the latest comments by Federal Reserve Chair Janet Yellen, who said on Friday that a rate hike in the coming months “would be appropriate” if the economy and labour market continue to show an improvement.

“No doubt much of the general talk impacting market action is still about a US rate hike either in June or July.

“However traders are not only increasingly confident that the US economy is strong enough to withstand another hike but also that the Fed won't pull the trigger if this would mean that the US economy is being put at risk,” said Markus Huber, a trader at City of London Markets.

“Trading volume should be on the light side as not all traders will be back in the markets in the aftermath of public holidays in the US and the UK yesterday.”

In corporate news, German car maker Volkswagen skidded after posting a 20% drop in first-quarter profit.

French car maker Peugeot Citroen was in focus following a report the Peugeot family is planning to hold talks with the French government to discuss the future of its stake in the company.

In London, shares IG Group rallied after the spreadbetting firm said it expects earnings for the year to be slightly ahead of views after a solid fourth quarter.

It was a lot busier on the data front, as figures from Eurostat showed the unemployment rate in the Eurozone was 10.2% in April, unchanged from March and in line with expectations.

The rate was down from 11% in April of last year and marks the lowest recorded in the euro bloc since August 2011.

In the European Union, unemployment came in at 8.7% in April, down from 8.8% the month before and from 9.6% in April 2015.

This is the lowest rate recorded in the EU28 since April 2009.

Meanwhile, an initial estimate from Eurostat revealed that deflation in the euro area eased in May. The consumer price index fell an annualised 0.1% in May, as expected by analysts, compared to a 0.2% drop in April.

The improvement was driven by increases in food, alcohol, tobacco and non-energy industrial goods. However, energy prices continued to fall, albeit at a slower pace.

Core inflation, which excludes volatile items such as food and energy, rose 0.8% year-on-year in May which was in line with forecasts and followed a 0.7% increase in April.

Earlier, figures from Destatis showed German retail sales unexpectedly fell in April. Retail sales were down 0.9% on the month, versus expectations for a 0.9% increase. Still, this was better than the 1.4% drop seen in March.

On the year, retail sales were up 2.3%, beating economists’ expectations of a 1.9% jump.

Later in the day, figures Stateside revealed that personal consumption expenditures jumped by 1.0% month-on-month in April.