Europe close: Basic Resources weigh, Deutsche Bank downgrades German stocks
European stocks yielded on Tuesday as the single currency regain some altitude on the back of a surprisingly strong reading on Germany's third quarter gross domestic product, alongside another burst of weaker-than-forecast Chinese economic data.
At the closing bell, the benchmark Stoxx 600 was 0.59% or 2.27 points lower at 383.86, alongside a 0.31% or 40.94 point dip for the German Dax to 13,033.48 while the Cac-40 had slipped 0.49% or 26.05 points to 5,315.58.
Just as on Monday, Basic Resources was again the weak link in the chain following in the wake of the latest round of Chinese numbers, which showed industrial production and retail sales both slowing by more than had been anticipated in October.
The Stoxx 600's sub-index for Basic Resources was 2.77% lower to 435.69.
In parallel, euro-dollar jumped 0.95% to 1.1776.
To take note of, strategists at Deutsche Bank downgraded their recommendation for German shares from 'overweight' to 'underweight', saying they no longer looked overpriced versus Eurozone purchasing managers' indices and that they had 'overshot' on the basis based on where the trade-weighted euro was trading at.
On the economic front, Eurostat confirmed that gross domestic product in the single currency bloc expanded at a quarterly pace of 0.6%, as Germany's economy accelerated to a quarter-on-quarter pace of 0.8% (consensus: 0.6%), up from a 0.6% clip over the prior three months.
Net foreign trade and gross fixed capital formation both made positive contributions to the quarterly rates of growth in the euro area's largest economy, according to the German Ministry of Finance.
In parallel, the ZEW institute's economic sentiment index for Germany edged higher by 1.1 points to 18.7 (consensus: 19.8).
Economic expansions in Italy and Portugal also picked up steam with the rate of GDP growth for both rising from 0.3% in the second quarter to 0.5% for the third.