Banks, energy stocks weigh on European bourses; BMW tumbles
STOXX 600 down 0.5%
BMW slumps after cutting profit margin outlook
Germany's inflation slowed to 0.2% in August
AstraZeneca falls, lung cancer drug trial fails to improve survival
Updated at 1615 GMT
By Pranav Kashyap and Lisa Pauline Mattackal
Sept 10 (Reuters) -European equity markets largely lost ground on Tuesday, weighed by bank and energy stocks as investors tread cautiously ahead of key U.S. inflation data and an anticipated European Central Bank rate cut later in the week.
Shares of automaker BMW BMWG.DE slumped 11%, notching their worst day in over four years after the company cut its 2024 profit margin outlook due to sluggish demand in its key Chinese market and problems related to a braking system supplied by Continental CONG.DE.
Continental shares CONG.DE dropped 10.5%.
"With China only getting tougher and BMW overexposed to China, and with H2 recovery expectations looking a bit optimistic, it remains tough to see the positive catalyst for BMW," Citi analysts wrote in a note.
Bank stocks also fell sharply, tracking a selloff in U.S. lenders with analysts citing downbeat comments from Goldman Sachs GS.N CEO David Solomon.
Deustche Bank >DBKGn.DE> dropped 4.91%, and a European index tracking bank stocks lost 1.6%.
The oil and gas sector .SXEP also fell 1.6% as Brent crude prices slipped below $70 per barrel for the first time since December 2021.
The pan-European STOXX 600 index .STOXX fell 0.5%, reversing gains from earlier in the day, with the automobile sector .SXAP down 3.8% and German stocks .GDAXI falling nearly 1%.
Markets were uneasy ahead of Wednesday's U.S. inflation report, which could provide clarity on the size of the Federal Reserve's rate cut when it meets next week.
The path for interest rates and economic growth in the world's largest economy has largely set the tone for global markets over the past months.
In Europe, the ECB meets on Thursday and markets have fully priced in a 25 basis-point rate cut, though the policy path for the rest of this year remains more uncertain.
"The question for markets is what happens next," analysts at ING said.
"(The ECB) downplaying the chance of an October cut and confining itself to quarterly steps on rates – at least for now – should act as a brake on the potential pace of easing."
The rate-sensitive real estate sector .SX86P was one of the few gainers on the STOXX 600 index, rising 1.7%.
On the economic front, data showed German inflation slowed to 2% in August.
Among individual movers, Commerzbank CBKG.DE closed down 2.4% as the German government began to sell some of its shares, as previously announced. CEO Manfred Knof also said he would not seek another term after his contract ends in 2025.
Heavy-weight AstraZeneca AZN.L shed 2.4% after detailed study results showed its experimental lung cancer drug did not significantly improve patients' overall survival results.
Reporting by Pranav Kashyap and Lisa Mattackal in Bengaluru; Editing by Eileen Soreng and Emelia Sithole-Matarise
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