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European Markets End Lower On Growth Concerns

European stock markets drifted lower on Tuesday amid renewed worries about global economy after the International Monetary Fund lowered its forecast for global growth in the current year.

Lingering worries about U.S.-China trade disputes and Brexit uncertainty too weighed on sentiment. Lower commodity prices contributed as well to the weakness.

With several markets in the region finishing weak, the pan-European Stoxx 600 index shed about 0.4%.

Among the major markets in the region, the U.K. ended notably lower with its benchmark FTSE 100 falling nearly 1%. Germany's DAX and France's CAC 40 shed 0.41% and 0.42%, respectively. The Swiss SMI index ended lower by 0.5%.

Among other markets, Finland, Italy, Netherlands, Norway, Portugal, Romania and Sweden lost 0.4 to 1%. Spain's benchmark shed about 0.25%. Greece and Ireland ended stronger by about 1.8% and 0.4%, respectively.

Shares of Swiss banking major UBS declined by more than 3% on lower than expected earnings.

In the U.K. market, Royal Dutch Shell, Old Mutual, Rio Tinto and Capita lost 2 to 3%. Glencore, Antofagasta, BHP Group, BP and Intertek also declined sharply.

Shares of EasyJet gained more than 6% after the company maintained its full-year outlook despite drone disruption at Gatwich airport in December.

In Germany, Covestro declined by 3.15%. Thyssenkrupp ended lower by about 2.3%, Infineon, Deutsche Bank, Henkel, Siemens, Beiersdorf, BASF and Deutsche Boerse are down 1 to 2%.

Wirecard, Lufthansa, Linde and Heidelberg Cement gained up 1.2 to 2%.

Among French stocks, ArcelorMittal declined more than 4%. ST Microelectronics ended 3.4% down. BNP Paribas, Valeo, Societe Generale, Credit Agricole, Technip and Dassault Systemes shed 1 to 2%. Saint Gobai gained about 1.3%.

In its latest report, the IMF lowered its forecasts for global economic growth to 3.5% in 2019 and 3.6% in 2020, 0.2 and 0.1 percentage points below last October's projections.

An escalation of trade tensions and a worsening of financial conditions are key sources of risk to the outlook, the IMF said.

The IMF also expressed concerns about a bigger than expected slowdown in Chinese growth, the Brexit cliffhanger, and the ongoing U.S. government shutdown.

Investors are also following news from the World Economic Forum in Davos, Switzerland.

In economic news, Germany's investor confidence improved further at the start of the year to its highest level in four months, defying expectations for a weakening, survey data from the ZEW - Leibniz Centre for European Economic Research showed.

The ZEW Indicator of Economic Sentiment for Germany rose to -15.0 points from -17.5 in December. Economists had forecast the index to ease to -18.5. The latest reading was the highest since September, when the score was -10.6.

The current conditions index of the survey fell sharply to 27.6 from 45.3, marking the lowest level since January 2015.

The ZEW investor confidence measure for Eurozone edged up 0.1 point to -20.9. The current conditions index, meanwhile, shed 6.8 points to reach a level of 5.3 points.

Figures from the office of National Statistics showed that UK budget deficit for December exceeded economists' expectations and was the second lowest figure for the month in 18 years. The public sector net borrowing, or PSNB, was GBP 3 billion in December, which was GBP 0.3 billion more than a year ago. Economists had forecast borrowing of GBP 1.9 billion.

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