European stocks experienced a downturn on Tuesday, retracing gains made in the previous session amid reports that the forthcoming Trump administration might consider implementing less aggressive tariff measures than previously anticipated.
Subsequently, U.S. President-elect Donald Trump dismissed these reports as "fake news," adding another layer of unpredictability to the situation.
The pan-European STOXX 600 index decreased by 0.3 percent, settling at 511.67, as investors awaited the release of significant eurozone inflation data later in the day. The German DAX index experienced a slight dip, while France's CAC 40 remained virtually unchanged with a slight positive trend, and the U.K.'s FTSE 100 fell by 0.4 percent.
The European Central Bank is scheduled to hold its next meeting on January 30th, with market participants widely anticipating a rate cut of approximately 100 basis points during the first half of 2025.
Analysts predict the eurozone's consumer inflation index to have increased by 2.4 percent year-on-year in December, compared to 2.2 percent in November. Concurrently, data released earlier today showed that France's annual inflation rate held steady in December, potentially bolstering the ECB's case for a rate cut later this month.
Meanwhile, in the U.K., house prices unexpectedly fell by 0.2 percent in December, contrasting with a 1.2 percent rise in November, according to mortgage lender Halifax.
In corporate developments, Sodexo SA declined by 6.6 percent in Paris. The French food services and facilities management company reported an organic revenue increase of nearly 5 percent for the first quarter, falling short of market expectations.
Conversely, shares of Next Plc climbed nearly 3 percent following the high street retailer's report of robust Christmas sales and an upward revision of its profit forecast for 2025.
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