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Major European Markets Close Weak On Inflation, Global Growth Concerns

The major European markets closed weak on Tuesday amid rising concerns over inflation, pressures on quarterly earnings and Chinese real estate giant Evergrande's debt woes.

A downward revision in global growth forecast by the International Monetary Fund weighed as well. The IMF cited citing supply chain challenges and persistent Covid spread for the revision in forecast.

The IMF projects global economy to grow 5.9% in 2021 and 4.9% in 2022, 0.1 percentage point lower for 2021 than in the July forecast.

Investors also looked ahead to earnings announcements from top U.S. companies. Analysts expect companies to report slowing growth due to supply-chain snags and rising prices.

The pan European Stoxx 600 edged down 0.07%. The U.K.'s FTSE 100 ended lower by 0.23%, Germany's DAX and France's CAC 40 both shed 0.34%, and Switzerland's SMI declined 0.13%.

Among other markets in Europe, Czech Republic, Ireland, Netherlands and Russia drifted lower.

Austria, Denmark, Greece, Iceland, Norway, Poland, Portugal, Spain and Sweden closed higher, while Belgium, Finland and Turkey ended flat.

In the UK market, IAG declined 3.3%. Compass Group, Prudential, Melrose Industries, Rio Tinto, Entain, Pearson, ITV, Anglo American, Johnson Matthey, Intercontinental Hotels Group, BHP Group and AstraZeneca lost 1 to 2.2%.

easyJet drifted lower after the airline said it flew 17.3 million seats in the fourth quarter, operating 58% of fiscal 2019 capacity with a stronger performance on intra-European and U.K. domestic routes.

Ocado Group climbed 5.4% and Coca-Cola surged up 4.6%. Bunzl, Croda International, Polymetal International, B&M European Value Retail, Antofagasta, Land Securities, Lloyds Banking Group, Glencore and Reckitt Benckiser gained 1 to 2%.

In France, Technip shares tumbled more than 5%. Safran shed about 2.7%. Accor, STMicroElectronics, Bouygues, Thales, Sanofi, Air France-KLM, Carrefour and Credit Agricole lost 1 to 2%.

Societe Generale SA declined marginally. The French bank said that it will cut 3,700 jobs between 2023 and 2025, as part of a plan announced last year to merge its domestic retail operations.

Sodexo moved up nearly 2% and Veolia gained about 1.1%. Renault and Hermes International also closed on a firm note.

In the German market, MTU Aero Engines lost about 3%. Deutsche Telekom, Bayer, Zalando, Fresenius, Volkswagen and Infineon Technologies shed 1 to 2%.

Merck surged up more than 2% and Sartorius gained nearly 2%. RWE, Deutsche Telekom, Hello Fresh. E.ON and BASF closed moderately higher.

Gerresheimer AG shares moved higher after the company reported higher earnings for the third quarter, reflecting strong revenue growth.

Swiss stock Lonza Group moved higher after the company updated its 2024 Group and divisional mid-term guidance driven by strong momentum across businesses.

Givaudan declined despite reporting decent sales growth in the first nine months of the year.

In economic releases, German wholesale prices grew 13.2% annually in September, following August's 12.3% increase, Destatis reported.

The last time there was a higher increase than in the same month of the previous year was in June 1974, when wholesale prices rose 13.3% in the wake of the first oil crisis.

U.K. retail sales grew only 0.6% on a yearly basis in September after rising 3% in August, data published by the British Retail Consortium and KPMG revealed. At the same time, like-for-like sales fell 0.6% annually.

UK employment increased sharply in September, data from the Office for National Statistics showed on Tuesday.

The number of payroll employees showed another monthly increase, up 207,000 to a record 29.2 million in September.

In three months to August, the employment rate increased 0.5 percentage points on the quarter, to 75.3%. At the same time, the ILO jobless rate came in at 4.5% in three months to August, as economists' expected.

The German ZEW Economic Sentiment index arrived at 22.3 in October, down from the previous reading of 26.5. The Eurozone ZEW Economic Sentiment for the month fell to 21.0 for the current month as compared to the previous reading of 31.1.

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