European stock markets closed lower across the board Tuesday as investors continued to respond to earnings disappointments and a fixed income market that has continued to push bond yields higher.
Third-quarter earnings across Europe have been mixed to date, although the underperformers have garnered more attention. Economic data, meanwhile, continues to point towards stable U.K. growth and a steady if not spectacular eurozone recovery.
With inflation accelerating, also, expectations for another interest rate cut in the U.K. have been shelved and markets are now turning their attention toward the possibility that the next move might need to be upwards.
Likewise in Europe, both headline and core inflation are beginning to trend higher as the effect of commodity price falls begins to fade, while the European Central Bank has recently exhibited a reluctance to talk up expectations for more easing in the coming months.
The rise in rates and changes of interest rate expectations have hit yield- and inflation-sensitive sectors, such as REITs, utilities and telecoms -- with many of Europe's biggest decliners being drawn from these sectors Tuesday.
London's FTSE 100 was down by 0.6% to 6,917.4 and the FTSE 250 was lower by 0.2% to 17,523.4. Germany's DAX was the top decliner for the session, after falling by more than 1.2% to 10,526.4. France's CAC 40 was 0.9% lower at 4,470.8.
This is while the Europe Stoxx 600, the broadest measure of European stocks, fell by 1.04% to 335.4.
Fixed income markets continued to push yields higher, with the U.K. 10-year government Gilt yield rising to 1.17% as it continues to reverse its post-referendum decline. The French Tresor yield spiked to 0.51% in the afternoon, while the German Bund yield rose by just a fraction to a tad under 0.18%.