European equity markets weakened on Tuesday, extending caution ahead of the Federal Reserve's interest-rate decision on Wednesday. BlackRock capital markets strategist Ann-Katrin Petersen said recent US inflation data had made a rate hike by the Fed more likely in the eyes of markets.
The Euro Stoxx 50 fell 0.52% to 6,227.79. Outside the eurozone, the FTSE 100 lost 0.73% to 10,619.10, and Switzerland's SMI declined 0.94% to 13,748.19.
Pressure also came from bonds and oil. RoboMarkets capital markets strategist Jürgen Molnar said oil prices remained stubbornly high, while the yield on 10-year US Treasury bonds reached 5%, a level he described as harmful for equities.
Financial stocks were the weakest sector, weighed down by losses at UBS. Market observers cited regulatory concerns ahead of upcoming political discussions and broader weakness in the financial sector. The sector's largest stock fell 4%. Bank shares were also affected by negative cues from the United States, where major banking names had recorded losses.
Luxury stocks were among the losers after disappointing economic data from China. Retail sales in August came in below expectations, pointing to sluggish consumer spending. LVMH shares fell 2%. Bernstein lowered its price target for the stock from 570 euros to 520 euros, a level still well above the current share price.
