European Markets Finished Mostly Lower Ahead Of Fed Meeting

(RTTNews) - The majority of the European markets ended Tuesday's session in negative territory, following the gains of the previous session. Investors shrugged off data which showed that Germany's economic confidence increased to the highest level in nearly seven years. They continue to play it cautious ahead of Wednesday's announcement from the Federal Reserve. Investors are eagerly awaiting an indication of when the Fed will begin to taper its stimulus measures.

The Federal Reserve's job of helping the U.S. economy recover from the 2007-2009 recession is ''still ongoing," according to outgoing Fed Chairman Ben Bernanke. In prepared remarks made at an event celebrating the 100th anniversary of the Federal Reserve, Bernanke talked about unprecedented measures taken in support of the economy.

However, Bernanke, who steps aside next month after eight years as the world's most powerful central banker, offered few hints about this week's closely watched monetary policy decision.

The plans designed for winding down failing banks may be too complex, European Central Bank President Mario Draghi said late Monday. Draghi also expressed concern about the financing arrangement.

"We should not create a Single Resolution Mechanism that is single in name only," Draghi told the European Parliament.

"I am concerned that decision-making may become overly complex and financing arrangements may not be adequate," the central bank chief said.

Draghi added the new procedure should not take a long time to decide on failing banks. The decision to resolve a bank should be made "in an instant."

The persisting weakness of Eurozone's external sector provides further evidence that the economic growth will remain sluggish in the near term, Paul Hollingsworth, Assistant Economist at Capital Economics, said.

According to the economist, the latest merchandise trade data signal that the external sector remains too weak to single-handedly power an economic recovery. Weak global demand and a strong euro indicate that growth will remain rather more subdued than the recent economic surveys suggest.

Greece's central bank said on Tuesday that the country's economy is set to exit a six-year long recession and start recovering next year. In its Interim Report On Monetary Policy, the Bank of Greece said, "It is now reasonable to forecast that 2014 will see the end of the recession and the start of recovery."

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 1.11 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.71 percent.

The DAX of Germany dropped by 0.86 percent and the CAC 40 of France fell by 1.24 percent. The FTSE 100 of the U.K. decreased by 0.55 percent and the SMI of Switzerland dipped by 0.32 percent.

In Frankfurt, Deutsche Bank declined by 1.28 percent, while Commerzbank rose by 0.50 percent.

Wirecard increased by 1.46 percent. Exane BNP upgraded the stock to ''Outperform'' from ''Neutral.''

In Paris, Vinci dropped by 2.74 percent. Merrill Lynch downgraded its rating on the stock to ''Neutral'' from ''Buy.''

Lenders BNP Paribas and Societe Generale finished lower by 2.19 percent and 1.53 percent, respectively.

Rexel dipped by 0.95 percent, after Ray Investment said it would sell a 7 percent stake in the distributor of electrical parts and supplies.

CGG sank by 16.85 percent, after it announced that its fourth quarter results will be impacted by project delays.

In London, Dixons Retail fell by 5.01 percent. The electrical retailer reported a sharp increase in profit before tax for the first half, but said it sees a more challenging second half.

UBM dropped by 3.92 percent, following a broker downgrade.

Admiral Group declined by 2.22 percent. The U.K. Competition Commission has announced that it is seeking ways to reduce the cost of auto insurance.

Swiss Re's Group Chief Financial Officer George Quinn announced he would step down from his role, effective April 30, 2014, to join Zurich Insurance Group AG. Zurich Insurance is rose by 1.85 percent in Zurich, while Swiss Re fell by 0.96 percent.

HSBC upgraded Hennes & Mauritz to ''Neutral'' from ''Underweight.'' The stock climbed by 1.17 percent in Stockholm.

Germany's economic confidence increased for the fifth month in a row to the highest level in more than seven years in December, suggesting that the recovery is gaining strength, a closely-watched survey showed Tuesday.

The ZEW indicator of Economic Sentiment climbed sharply to 62 in December, the highest since April 2006, from 54.6 in November, a survey conducted by the Centre for European Economic Research/ZEW revealed. Economists were looking for a modest increase to 55.

European new car registrations rose at a slower pace in November, according to the latest data released Tuesday by the European Automobile Manufacturers' Association or ACEA.

New passenger car registrations rose 1.2 percent year-on-year in November, slower than a 4.7 percent increase in October and a 5.4 percent rise in September. A total of 938,021 units were sold in November, the third lowest level recorded to date for the month of November in absolute terms.

Eurozone inflation rose to 0.9 percent in November from 0.7 percent a month ago, Eurostat reported Tuesday. The rate matched the flash estimate published on November 29.

U.K. inflation moved closer to the 2 percent target in November, reaching the lowest in four years, helped by smaller increases in food and energy prices, data from the Office for National Statistics showed Tuesday.

Factory gate inflation also hit a 4-year low in November, suggesting weak inflationary pressure in the pipeline.

Inflation slowed to 2.1 percent in November, the lowest since the same month of 2009. The figure was forecast to remain unchanged at 2.2 percent in October. Inflation has been above the 2 percent target since December 2009.

Residential property prices in the U.K. increased at the fastest pace in more than three years in October, and the rate of growth surpassed economists' expectations, latest data showed Tuesday.

The house price index advanced 5.5 percent annually in October, after registering a 3.8 percent gain in September, the Office for National Statistics said. Economists had forecast a slower growth of 4.1 percent for October.

More companies expect to create jobs than not over the next 12 months for the first time since the onset of the recession in 2008, survey results from the Confederation of British Industry showed Tuesday. According to the CBI/Accenture Employment Trends Survey, 51 percent of firms expect their workforce to be larger in 12 months' time, with private sector workforces anticipated to grow across all regions.

Consumer prices in the U.S. came in unchanged in the month of November, according to a report released by the Labor Department on Tuesday, with a steep drop in energy prices offsetting increases in prices for shelter and airline fares.

The Labor Department said its consumer price index was unchanged in November after edging down by 0.1 percent in October. The flat reading for the index came in line with economist estimates.

Offering an encouraging sign for the housing market going into 2014, the National Association of Home Builders released a report on Tuesday showing that U.S. homebuilder confidence improved by much more than anticipated in the month of December.

The report showed that the NAHB/Wells Fargo Housing Market Index climbed to 58 in December from 54 in November. Economists had been expecting the index to edge up to 55.