European Equity Markets Fall Amid U.S. Inflation Concerns and ECB Rate Decisions

European equity markets lost ground due to declining bank and energy stocks and investor caution ahead of U.S. inflation data. BMW suffered a 11% drop, largely due to issues in the Chinese market, with bank stocks and oil prices also falling sharply. The ECB's upcoming rate cut further added to market uncertainty.

European equity markets experienced a significant downturn on Tuesday, primarily impacted by declines in banking and energy stocks as investors exercised caution ahead of pivotal U.S. inflation data and an anticipated European Central Bank (ECB) rate cut scheduled for later in the week.

A notable drop was observed in BMW shares, which plummeted 11%, marking their worst day in over four years. This was largely attributed to a revised 2024 profit margin outlook caused by sluggish demand in China and issues with a braking system supplied by Continental, whose shares also suffered a 10.5% fall.

Bank stocks mirrored declines seen in U.S. lenders, with notable drops in Deustche Bank and an index tracking European bank stocks. The oil and gas sector also experienced a downturn, correlating with a dip in Brent crude prices. The pan-European STOXX 600 index reversed earlier gains, with varied sectoral impacts linked to looming inflation reports and rate decisions.

(With inputs from agencies.)