Europe close: Stocks lose steam in late Tuesday trading
European stocks were just above the waterline by the end of trading on Tuesday, as investors eyed the next round of US-China trade negotiations and digested a mixed German Ifo survey.
The pan-European Stoxx 600 ended the day broadly flat, rising just 0.01% to 389.84, while Germany’s DAX was down 0.29% at 12,307.15 and the CAC 40 in Paris lost 0.04% to 5,628.33.
Closer to home, the FTSE 100 ended the session down 0.47% at 7,291.43, while the FTSE 250 was 0.62% lower at 19,919.07.
Investors had spent much of the session in a cautiously optimistic mood over the outcome of renewed US-China trade talks, after US Treasury Secretary Steven Mnuchin confirmed the next round of top-level negotiations will take place in two weeks.
“While stocks are likely to rise in anticipation of a deal, the sense of deja vu also brings scepticism over whether such a deal is there to be made,” said Joshua Mahony, market analyst at IG.
Following the release of disappointing eurozone and German manufacturing data on Monday, market participants were digesting the latest German business sentiment survey from Ifo, which showed a slight improvement in confidence but a deterioration in expectations in September.
The Ifo business climate index rose to 94.6 from 94.3 in August, coming in just above consensus expectations for a reading of 94.5.
“Today’s numbers will certainly feed the debate around Berlin implementing a fiscal package to support the German economy,” said analysts from Oxford Economics.
“However, we think that a sizeable fiscal easing in Germany is unlikely in the short-term as the political cost seems too high in the absence of further economic deterioration.”
In London, the UK Supreme Court ruled that the government's five week suspension of parliament was unlawful, dealing a severe blow to Prime Minister Boris Johnson's authority and leading to renewed calls for his resignation.
The pound was higher on the news, last up 0.43% against the dollar at $1.2482 and 0.38% firmer against the euro at €1.1351.
Oanda market analyst Craig Erlam said it was extremely difficult to say whether the ruling will be anything more than a headline maker, adding that he would be "very surprised" if Johnson didn't have a backup plan.
Among individual stocks, Umicore surged 5.8% after the Belgian firm signed a deal to sell 125,000 tons of nickel-manganese-cobalt cathode materials to South Korean electric vehicle battery maker LG Chem.
German biotechnology outfit Evotec was ahead 2.75%, after it formed a drug discovery collaboration with Japan's Takeda Pharmaceutical Company.
Travel company TUI was up 6.46%, and airlines EasyJet and Deutsche Lufthansa were higher by 1.85% and 2.04% respectively, following the collapse of competitor Thomas Cook on Monday.
Finally, K+S shares were in the red by 4.85%, as the German chemicals producer said it will cut production of potash fertilizers due to weak demand from China, where a halt had been imposed on imports of the products.