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European Markets Close Lower On Profit Taking, Italian Political Uncertainty

European markets ended mostly lower on Tuesday, weighed down by political uncertainty in Italy and on profit taking after two successive days of solid gains.

Brexit jitters weighed as well after U.K. Prime Minister Boris Johnson reaffirmed his position that the EU would need to compromise for a Brexit deal to happen.

The mood was cautious right through the session with traders looking ahead to the release of the minutes of the U.S. Federal Reserve's July meeting. Markets were also digesting a mixed batch of eurozone economic data.

The pan European Stoxx 600 declined 0.68%. Among the major markets in Europe, the U.K. ended with sharp losses with its benchmark FTSE 100 going down by 0.9%. Germany's DAX and France's CAC 40 shed 0.55% and 0.5%, respectively. Switzerland's SMI ended 0.56% down.

Austria, Belgium, Czech Republic, Finland, Ireleand, Italy, Netherlands, Norway, Portugal, Spain and Sweden ended weak.

Denmark, Greece, Poland and Russia closed on a positive note, while
Iceland ended flat.

In London, Kingfisher, United Utilities, BT Group, BHP Group, Centrica, Tui, NMC Health and National Grid lost 2 to 3.1%.

Rentokil, Direct Line Insurance, Intertek, Severn Trent, Ferguson, IAG and British American Tobacco also declined sharply.

J Sainsbury moved up nearly 3%, extending recent strong gains.

In the German market, Vonovia shed more than 3% and E.ON declined 2.2%. HeidelbergCement, Lufthansa, Daimler, Henkel, Continental, RWE, SAP and BMW ended lower by 1 to 1.6%.

In the French market, ArcelorMittal, Publicis Groupe, Michelin, Veolia Entertainment, Credit Agricole, Technip, Sodexo, Peugeot, Societe Generale and Capgemini lost 1.2 to 2.1%, while Airbus Group shares gained about 1.15%.

Italian politics remained a key focus today. Italy's Prime Minister Giueseppe Conte announced he will resign and came down harshly on Deputy Prime Minister Matteo Salvini for pushing for a no-confidence vote.

Conte said Salvini's decision could bring about institutional and financial uncertainty in the country.

In economic news, Germany producer price inflation eased for the third straight month in July, data from Destatis showed. The data said producer prices increased 1.1% year-on-year in July, slower than the 1.2% expansion in June.

Another report from Destatis showed German employment increased by a seasonally adjusted 50,000 or 0.1% in the second quarter.

Data from Eurostat said Eurozone construction output remained unchanged in June after easing for three straight months. The report said production was flat after decreasing 0.5% in May and 1.5% in April. Building output gained 0.3%, while civil engineering fell 0.5%.

On a yearly basis, construction output growth eased to 1 percent in June from 1.7 percent in May. This was the weakest expansion in five months.

UK manufacturing orders decreased at a slower pace in August, the Industrial Trends Survey from the Confederation of British Industry showed Tuesday.

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