- Concerns of China slowdown escalate
- German GDP confirmed
- French business confidence stable
- Ukraine delays formation of unity government
FTSE 100: -0.86%
CAC 40: -0.48%
FTSE MIB: -0.38%
IBEX 35: 0.18%
Stoxx 600: -0.29%
European stocks were mostly lower amid concerns that a sharp fall in China's yuan might slow growth in the world's second largest economy.
China's yuan dropped the most in more than three years on bets the central bank wants to end the currency's appreciation to boost trading.
The People's Bank of China has also been draining funds from the financial system as lower money market rates signal abundant supplies of yuan amid government efforts to clean up risky lending practices.
Stocks in Shanghai and Hong Kong declined, dragging down markets in Europe, one of China's major trading partners.
China's stocks were also down yesterday after the Industrial Bank Co. temporarily tightened financing for property developers as it assessed market conditions and prepared new credit policies.
In the US later on, the consumer confidence reading for February will be unveiled and is expected to fall slightly to 80 from 80.7 the prior month.
German GDP, French business confidence
Germany's gross domestic product (GDP) increased by a modest 0.4% on the quarter between October and December compared with 0.3% during the previous three months, the Federal Statistics Office today confirmed following an earlier flash estimate.
Foreign trade drove growth in Europe's largest economy in the fourth quarter while domestic demand dragged.
French business confidence remained stable in February, continuing to point to a recovery, the statistics bureau Insee said on Tuesday.
The indicator of French business confidence came in at 100, the long-term average for the index and in line with expectations.
Meanwhile, the European Commission was due to release its winter economic forecast for the euro-area. In the autumn it expected GDP growth to be 1.1% in 2014 and 1.7% in 2015, while inflation was projected to 1.5% in 2014 before falling to 1.4% in 2015.
The report comes after European Central Bank (ECB) President Mario Draghi hinted that he may ease monetary policy at the March meeting next week following the release of more comprehensive data, including the Bank's own economic forecasts.
Elsewhere in Europe, Italy's Prime Minister, Matteo Renzi, won a vote of confidence in the upper house of parliament yesterday, paving the way for much needed economic reforms. Another confidence vote will be held in the lower house, or chamber of deputies, today. However, unlike in the senate, the Renzi's centre-left Democratic party (PD) enjoys a clear majority.
In the Ukraine, the nation's interim President Olexander announced today that the formation of a unity government was delayed until Thursday to allow further consultations. A unity government would allow the troubled nation to receive economic aid to prevent a default but many in Ukraine's Russian-speaking regions oppose the installation of a more European-leaning interim administration.
A gauge of miners, including Rio Tinto and Anglo American, were down as the price of metals fell on the drop in the Chinese yuan.
Vivendi declined after the French media and telecoms business reported 2013 results that fell short of analysts' expectations.
Jyske Bank advanced after the Dutch lender agreed to buy BRFkredit for about 7.4bn kroner.
Ashmore Group fell after the UK emerging markets money manager reported $2.9bn of net outflows in its fiscal first half as investors sought to avoid assets in developing economies.
Aixtron edged lower as the German maker of equipment for semiconductors reported fourth-quarter sales below forecasts.
St. James's Place was higher after the British wealth manager increased its full-year dividend by 50%.
Fresenius Medical Care slid as the world's biggest provider of kidney dialysis posted full-year earnings that missed market forecasts.
Straumann Holding gained after the world's biggest maker of dental implants reported a increase in 2013 earnings and said it expects revenue will rise in a low-single-digit range in 2014.
The euro rose 0.07% to $1.3744.
Brent crude futures dropped $0.354 to $110.250 per barrel, according to data from the ICE.