- German industrial output falls
- Eurozone investor confidence rises
- Speculation on US interest rate hike grows
FTSE 100: -0.39%
CAC 40: -0.48%
FTSE MIB: -0.60%
IBEX 35: -1.40%
Stoxx 600: -0.49%
European stocks declined following the release of a report which showed German industrial output fell at the sharpest rate since April 2012.
German industrial output dropped 1.8% in May compared to a month ago when it slipped 0.3%, weighed down by a fall in both manufacturing and construction production. Analysts had expected it to remain unchanged.
"Germany's May industrial production figures arguably brought the strongest warning yet that the Eurozone's fledgling economic recovery is in danger of grinding to a halt," Capital Economics said.
A separate report showed an unexpected increase in Eurozone investor confidence in July. The Sentix index rose to 10.1 from 8.5 in June. Economists had predicted it would dip to 7.8.
In the US, investors speculated on an interest rate rise as trading resumed after Friday's Independence Day holiday.
Some analysts are placing their bets on a sooner-than-expected interest rate hike by the Federal Reserve after last week's impressive jobs data which showed 288,000 jobs were added and the unemployment rate fell to 6.1% in June.
It was the first time since 2001 that five consecutive months had seen more than 200,000 jobs being added and was the lowest the unemployment rate has been since October 2008.
"That is unlikely to be enough to convince the Fed to hike interest rates any earlier than the middle of next year, or that appears to be what the markets believe given that these numbers were not met with a response typically associated with hike fears," according to Alpari UK analyst, Craig Erlam.
"The Fed minutes, which will be released on Wednesday, could shed more light on the current stance on rates, although it is worth noting that this meeting took place almost two weeks before Thursday's jobs report. That said, should more members highlight the improvement in the data recently and even hint at an earlier rate hike, it could weigh quite heavily on sentiment."
Deutsche Boerse, Helvetia
Deutsche Boerse slipped after Credit Suisse lowered it to 'underperform' from 'neutral'.
Helvetia Holding fell after the Swiss insurer said it will buy a majority stake in Nationale Suisse.
Bolsas y Mercados Espanoles edged lower after Credit Suisse lowered it to 'underperform' from 'neutral'.
TeliaSonera advanced after agreeing to buy Tele2 AB's Norwegian business.
Quindell declined after Gotham City Research questioned the company's profits.
PostNL rallied after raising its full-year profit forecast, due to a strong mail market in the Netherlands.
Sky Deutschland slumped after Nomura Holdings cut its rating to 'neutral' from 'buy'.
The euro rose 0.07% to $1.3605.
Brent crude futures dropped 0.381% to $110.22 per barrel, according to the ICE.