European Stocks Slip as Construction Sector Stumbles Amid Mixed Updates

European stocks declined on Tuesday, with the construction sector leading the losses, influenced by mixed corporate updates and U.S. inflation data. The STOXX 600 closed marginally lower, retreating from earlier record highs. The market is focused on earnings guidance with upcoming reports being crucial for investor confidence.

European stocks took a hit on Tuesday, primarily impacted by a drop in construction stocks amid mixed corporate updates and analysis of a U.S. inflation report. The STOXX 600 index closed 0.1% lower at 610.44, retreating from a previous record high earlier in the trading session.

Construction stocks were at the forefront of the decline, notably with Rockwool falling 7.7% following reports of Russian intervention in its Russian units. Additionally, Swiss company Sika saw a 4.8% decline in its full-year sales, resulting in a 10% fall in its shares. However, Germany's DAX index slightly bucked the trend, ending with gains for the eleventh consecutive day, bolstered by a 2% increase in Airbus shares.

Despite the declines, the STOXX 600 is performing strongly at the start of 2026 and outperforming the U.S. S&P 500, driven in part by defence stocks amid ongoing geopolitical tensions. Meanwhile, UBS CEO Sergio Ermotti is expected to step down by 2027, and Premier Inn owner Whitbread reported a robust rise in third-quarter sales.

(With inputs from agencies.)