European stocks ended a choppy session firmly lower on Tuesday, as a renewed slump in oil prices drove energy shares lower.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +1.19% dropped 1% to close at 338.72 after rising as much as 0.6% in early trade. The oil and gas sector /zigman2/quotes/210599627/delayed XX:SXEP +2.05% was putting in the worst performance as it lost 2.8%.
Oil group: The losses came as Brent crude futures and West Texas Intermediate prices /zigman2/quotes/209726727/delayed CLV26 0.00% each dropped almost 3% after the International Energy Agency sharply cut its forecast for global oil demand amid what it called “wobbling” Asian demand.
4 undervalued stocks suddenly zooming
Barron's Bounce: BorgWarner, Novo Nordisk, Vodafone, and Belmond all rose sharply in response to stories in the magazine. Here's why can keep going.
Among Europe’s oil producers, Norway’s Statoil ASA lost 2%, Portugal’s Galp Energia SGPS /zigman2/quotes/206136034/delayed PT:GALP +2.79% moved 3.4% lower, and Spain’s Repsol SA /zigman2/quotes/202941606/delayed ES:REP +2.36% gave up 2.5%.
Italian oil drilling services provider Saipem SpA /zigman2/quotes/203593562/delayed IT:SPM +1.48% fell 4.8%, and oil-service provider Petrofac Ltd. /zigman2/quotes/202340229/delayed UK:PFC +4.69% was pushed down 3.8%.
Mixed Fed messages: European stocks were also dropping as investors grappled with mixed messages from the Federal Reserve. Recent Fed speakers have hinted interest rates could go up as soon as next week, but after European trading closed on Monday, the central bank’s Gov. Lael Brainard said the lack of inflation pressure means “the case to tighten policy pre-emptively is less compelling.”
Stocks on Wall Street surged overnight and odds of a September rate hike fell after her remarks. U.S. stocks, however, fell back again on Tuesday.
“There has clearly been a disconnect between market thinking and what the Fed has been saying in recent weeks, so whilst on paper the risks may be low, in practice the market will be right in remaining nervous ahead of the 21st September meeting,” wrote FxPro Chief Economist Simon Smith in a note on Tuesday.
Other movers: Ocado Group PLC /zigman2/quotes/207225647/delayed UK:OCDO +0.99% stumbled 14% as the online grocery-delivery company posted a rise in third-quarter sales but said it’s still seeing margin pressure.
Partners Group Holding AG /zigman2/quotes/205147837/delayed CH:PGHN +1.05% jumped 8.4% after the Swiss private markets investment manager posted better-than-expected earnings for its first half.
Meanwhile, Spain’s IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX +2.00% fell 1.6% to 8,724.20, and Italy’s FTSE MIB stumbled 1.7% to 16,547.75.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.5463% was trading at $1.1243 compared with $1.1237 late Monday.
Data: German consumer prices fell 0.1% in August from July, but increased slightly from a year earlier, the Federal Statistics Office said on Tuesday, confirming its first estimate.