Europe close: Stocks off as Wall Street dips, single currency gains

European shares struggled to make headway on Tuesday, despite positive finishes overnight on Wall Street and in Asia as still wary investors kept a wary eye on Wall Street amid moderate gains in the euro.

The pan-European Stoxx 600 index retreated, slipping 0.63% to 370.58. All main bourses were also lower across the board, with the Dax down by 0.70% to 12,196.50 and the FTSE Mibtel dropping 1.35% to 22,034.42.

Acting as a backdrop, IG analyst Joshua Mahony said an unexpected rise in UK inflation had put further pressure on the Bank of England over interest rates, with the rise in sterling helping to pull the FTSE lower.

"European markets are back in familiar negative territory, after yesterday’s rebound in stocks failed to carry through into a second session," he said.

"While today’s losses are relatively minimal, it is the precedent that is being set which carries more weight, for given the size of last week’s losses, the bulls would be hoping to see a significantly more forthright and constant upward pressure."

In corporate results news, shares in Belgian telecoms operator Telenet fell 7% as the company reported a 2.3% rise in fourth quarter revenues to €644m. Adjusted EBITDA was up 6.9% to €299m.

Inmarsat was brought down to earth after HSBC cut its price target on the stock to 530p from 570p and said the company is being hurt by recent weakness of the dollar versus the pound and that the dividend is uncertain.

UK government outsourcing contractor Capita was again out of favour, as the shares fell. The company recently issued a profits warning and capital raising. The sector has been hit by the jitters since the spectacular collapse of Carillion.

On the positive side, shares in French computer games maker Ubisoft were among the top performers as the company beat sales targets in the last three months of 2017.

The company, which makes Assassins Creed, reported a 36.8% year-on-year jump in sales to €725m in its fiscal third quarter, ahead of its target of €700m.

European travel group TUI shares soared as the company reported that summer bookings for Turkey were picking up, on the day that Thomas Cook resumed flights to Tunisia.

Other travel shares took heart from the news with German carrier Lufthansa and UK budget airline Easyjet both up.