The European markets got off to a positive start Tuesday and climbed to their highest level in nearly a year in early trade. However, those early gains quickly began to erode and the majority of the markets ended the day in negative territory.
Profit taking was partly responsible for the pullback, as well as the reversal in commodity prices. The early struggles on Wall Street also weighed on the markets in the afternoon.
Most of the financial stability issues that were linked to low interest rates did not materialize and there are hardly any evidence that negative rates are hurting Eurozone banks' profitability, European Central Bank President Mario Draghi said Tuesday.
"At euro area level, we currently see no signs of credit-fueled housing bubbles, which are at the root of most serious financial crises," Draghi said in a speech at the second ECB Forum on Banking Supervision in Frankfurt.
"We have also seen little evidence that negative interest rates are undermining bank profitability, an issue which has caused a lot of concern," he said.
The pan-European Stoxx Europe 600 index weakened by 0.39 percent. The Euro Stoxx 50 index of eurozone blue chip stocks decreased 0.63 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.44 percent.
The DAX of Germany dropped 0.66 percent and the CAC 40 of France fell 0.48 percent. The FTSE 100 of the U.K. declined 0.65 percent, but the SMI of Switzerland finished lower by 0.74 percent.
In Frankfurt, BMW dropped 2.73 percent after posting lower Q3 profit due to higher expenses for research and development.
Biotechnology firm MorphoSys gained 1.83 percent after its Q3 net loss widened from last year.
Apple supplier Dialog Semiconductor sank 5.29 percent despite the company raising its full-year forecast.
In Paris, Credit Agricole rose 0.55 percent after it agreed to buy Italy's wealth-management specialist Banca Leonardo SpA for an undisclosed amount.
Semiconductor company Riber jumped 10.39 percent after winning a multi-million euros order in Asia.
In London, Associated British Foods tumbled 3.74 percent despite the company reporting a surge in full-year profit.
G4S weakened by 4.69 percent after it reduced its full year revenue growth forecast.
Imperial Brands climbed 0.86 percent after the tobacco group reported an increase in annual revenues on the back of favorable currency movements.
Fevertree shares soared 14.89 percent after the fizzy mixer drinks maker said it expects full-year results to be "materially ahead" of current market expectations.
Staffing firm Adecco Group fell 1.02 percent in Zurich on disappointing third-quarter earnings.
A.P. Moeller-Maersk sank 7.12 percent in Copenhagen after it posted a third quarter loss.
Utility Iberdrola lost 1.65 percent in Madrid after its core profit for the first nine months of the year declined 5 percent.
Eurozone retail sales rebounded in September largely reflecting a recovery in food sales, data from Eurostat showed Tuesday. Retail sales grew 0.7 percent month-on-month in September, reversing a 0.1 percent fall in August. This was the first increase in three months and came in better than the expected expansion of 0.6 percent.
Germany's industrial production declined more-than-expected in September, but the output expanded for the third quarter as a whole, signaling a robust underlying trend. Industrial production fell 1.6 percent month-on-month in September, in contrast to August's 2.6 percent increase, data from Destatis showed Tuesday.
This was the biggest fall since December 2016, when output decreased 1.8 percent. Production was forecast to drop 0.8 percent.
Germany's construction sector continued to expand strongly in October, though the rate of growth was the weakest in nine months, survey data from IHS Markit showed Tuesday. The headline Purchasing Managers' Index dropped slightly to 53.3 in October from 53.4 in September.
UK house prices increased at a faster pace in October, data from the mortgage lender Halifax and IHS Markit showed Tuesday. House prices increased 4.5 percent in three months to October from the same period of 2016, following 4 percent rise in three months to September. The annual rate came in line with expectations.
Like-for-like sales in the United Kingdom tumbled in October, the latest survey from the British Retail Consortium revealed on Tuesday - sliding 1.0 percent on year. That was well shy of forecasts for a gain of 0.8 percent and down sharply from the 1.9 percent increase in September.
For comments and feedback contact: editorial@rttnews.com
Market Analysis
December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.