- Eurozone inflation falls
- Eurozone jobless rate drops
- UK consumer confidence rises
- US consumer sentiment slides
FTSE 100: -0.43%
CAC 40: -0.34%
FTSE MIB: -0.03%
IBEX 35: -0.44%
Stoxx 600: -0.25%
European stocks were mainly down as Eurozone consumer prices fell unexpectedly, fuelling fears of deflation.
Eurozone inflation dipped to 0.7% in January from 0.8% in December, well below the European Central Bank's (ECB) 2% target. Economists had predicted inflation would rise to 0.9%.
Barclays Research said it continues to expect euro-area inflation to stand below 1% until the end of the first quarter of 2014.
"Given the lower January preliminary print, this implies that euro area headline HICP is likely to fall further in February and could reach a new low of 0.6% year-on-year," the bank added.
The report adds pressure on the ECB's President Mario Draghi to take greater measures to ward off risks of deflation.
In November, the monetary authority slashed interest rates to 0.25% from 0.5% in an effort to curb falling prices but it so far had little impact.
Draghi on Monday signalled a move towards monetary stimulus, saying the ECB would be prepared to buy packages of bank loans to households and companies.
Meanwhile, Germany's Bundesbank is said to be in favour of ending the ECB's policy of withdrawing significant amounts of money from the banking system to offset its government-bond holdings, The Wall Street Journal reported, citing a source.
The move would boost liquidity into the banking system and potential soothe recent volatility in money markets, the source said.
In other European news, the Eurozone unemployment rate dropped to 12% in December and the November reading was already revised down to this level from 12.1%. Analysts had expected it to remain unchanged.
Elsewhere in the bloc, the European Union's top banking regulator said Europe's largest banks will have to show their capital won't fall below 5.5% of their assets in an economic crisis. The European Banking Authority is examining a sample of 124 banks that cover more than half of each EU member state's banking industry and the results will be published at the end of October.
UK consumer confidence rises while US sentiment falls
UK consumer confidence rose more than expected in January as the economy showed further signs of recovery, GfK revealed on Friday.
The sentiment index jumped to -7 this month from -31 in December, surprising analysts who had predicted a reading of -12. It marks the highest level since September 2007.
US consumer sentiment fell slightly in January, according to data out Friday, though the decline was not as bad as first expected.
The final reading of the University of Michigan consumer confidence index came in at 81.2 for January, above the initial estimate of 80.4, but down from 82.5 in December.
Another report in the US showed personal spending increased 0.4% over the month after rising by an upwardly revised 0.6% in November, the Commerce Department said. Economists had predicted it to climb 0.2%.
However, personal income remained unchanged in December after increasing by 0.2% a month earlier, missing estimates for growth of 0.2%.
Separately, the Chicago purchasing managers' index (PMI) for manufacturing and non-manufacturing activity in the region fell to 59.6 in January from 60.8 in December but ahead of the 59 reading expected.
Electrolux, BT Group
BT Group advanced after the UK phone company reported third-quarter earnings that beat analysts' estimates.
Next rose slightly after the fashion retailer said it would make a special dividend payment of 50p on May 1st following a good Christmas.
Randgold Resources gained after saying Chairman Philippe Liétard will step down and be replaced by Christopher Coleman, who has been an independent Non-Executive Director of the gold miner since 2008.
Electrolux slumped after the world's second-biggest maker of home appliances reported quarterly profit that missed consensus forecasts.
Diageo declined after Goldman Sachs cut its recommendation on the world's biggest distiller to 'neutral' from 'buy', citing continued challenges to growth in emerging markets.
Banco Bilbao Vizcaya Argentaria rallied after the Spanish lender posted a smaller quarterly loss than analysts had forecast.
LVMH Moet Hennessy Louis Vuitton led European luxury-goods stocks higher after saying growth in fashion and leather-goods sales rebounded in the fourth quarter.
The euro fell 0.39% to $1.3502.
Brent crude futures fell $1.020 to $106.860 per barrel, according to data from the ICE.