(Bloomberg) -- European equities fell on Tuesday after disappointing earnings from heavyweights BP Plc and Novartis AG and as traders assessed growing market risks in what is shaping up as a key week for stocks.
The Stoxx Europe Stoxx Index gave up earlier gains to end 0.6% lower, with travel and leisure stocks, autos and the energy sector among the biggest laggards.
Earnings prompted some of the sharpest moves, with Novartis the single greatest drag on the benchmark after the pharmaceuticals maker posted disappointing sales growth for some of its key drugs. BP also weighed, with the oil major dropping as it reported a rise in net debt.
Banks were a bright spot, boosted by a rise in HSBC Holdings Plc’s shares after the lender announced a $3 billion stock buyback as its profit beat estimates. Santander Bank Polska SA was another gainer, rising after its strong earnings momentum during the third quarter.
European stocks have been rangebound for much of the past month as a plethora of risks confronts investors. In the UK, eyes will be on Wednesday’s budget and the expected package of tax increases and spending cuts, while traders will also be watching eurozone inflation data due later in the week.
Meanwhile, with just a week to go, the US presidential election remains too close to call.
“The US election is likely to be the primary catalyst for the next move in European equities,” said Hani Redha, portfolio manager for global multi-asset at PineBridge Investments. “Given the current stagnation in the eurozone’s economy, this driver is likely to be decisive.”
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--With assistance from Sagarika Jaisinghani.
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