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European Equity Benchmarks Close Lower; Inflation Rises, Unemployment Drops

The broad-based major European indices closed lower in Tuesday's trading session, as rising mining stocks were not enough to keep slumping bank stocks from weighing down the markets.

In economic news, Euro area annual inflation was pegged at 1.8% in January 2017, up from 1.1% in December, according to Eurostat, the statistical office of the European Union. Energy is expected to have the highest annual rate of inflation in January, followed by food, alcohol and tobacco, services, and non-energy industrial goods.

Eurostat also reported that seasonally adjusted GDP rose 0.5% in the euro area (EA19) and 0.6% in the EU28 during Q4 compared with the previous quarter. In Q3 of 2016, GDP had grown by 0.4% in the euro area, and by 0.5% in the EU28.

Meanwhile, the unemployment rate in the euro area (EA19) was 9.6% in December, down from 9.7% the previous month, and down from 10.5% in the year-ago month. It is the lowest rate recorded in the euro area since May 2009. The EU28 unemployment rate was 8.2% in December, stable compared to the previous month, and down from 9% in December of 2015. It is the lowest rate recorded in the EU28 since February 2009.

The lowest unemployment rates in December 2016 were recorded in the Czech Republic (3.5%) and Germany (3.9%). The highest unemployment rates were observed in Greece (23.0% in October 2016) and Spain (18.4%).

In Germany, roughly 43.5 million persons resident in Germany were in employment in December, according to the Federal Statistical Office (Destatis). Compared with December 2015, the number of persons in employment increased by 238,000.

Destatis also reported that turnover in retail trade in December was in real terms 1.1% smaller and in nominal terms 0.6% larger than that in December 2015. Compared with the previous year, turnover in retail trade for the whole year was larger by 1.6% in real terms and by 2.2% in nominal terms than in 2015.

In equities, food retailer Tesco led the FTSE lower in London, falling 5.8%, followed by banks Barclays and Royal Bank of Scotland, which dropped 4.8% and 4.3% each. Meanwhile, mining stocks bucked the market trend as Randgold Resources, Anglo American, Fresnillo, BHP Billiton, and Antofagasta rose 1.9%, 1.8%, 1.6%, and 1.5% respectively.

In Frankfurt, apparel and footwear retailer Adidas, and automaker BMW led the DAX into negative territory, falling 2.8% and 2.7% each. They were followed by airline operator Deutsche Lufthansa, life sciences company Bayer, and health care company Fresenius SE, which lost 2.2%, 2.1%, and 1.9% respectively.

And in Paris, bank Societe Generale, and steel and mining company ArcelorMittal led the CAC lower, falling 3% and 2.3% each. Public relations company Publicis Groupe, and luxury goods company Kering were off 1.9%, while bank BNP Paribas and hospitality company Accor dropped 1.8% and 1.7% respectively.

The FTSE fell 0.27%, the DAX dropped 1.25%, and the CAC-40 lost 0.75%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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