By Amruta Khandekar and Shristi Achar A
(Reuters) -European stocks edged lower on Tuesday as a slew of downbeat earnings and higher government bond yields outweighed gains in energy shares and slight easing of concerns about risks stemming from the Middle East conflict.
The pan-European STOXX 600 index slipped 0.1%, while the blue chip index ended flat.
U.S. President Joe Biden is set to make a high stakes visit to Israel on Wednesday to show support for its war on Hamas.
"This just gives a picture of markets that is betting on the fact that this (conflict) isn't going to get too much worse," said Daniela Hathorn, senior market analyst at Capital.com.
"U.S. diplomacy is going to play its part and it will remain as kind of a very controlled and localized issue that won't impact greater markets."
Construction and materials led sectoral declines, down 0.9%.
The European Commission said it was carrying out unannounced antitrust inspections in the construction chemicals sector in several member states, where companies were suspected of anti-competitive behaviour.
Pressuring stocks, euro zone bond yields rose further after U.S. retails sales beat estimates. [GVD/EUR]
While geopolitical tensions have gripped the market's attention, investors also remain focused on the policymakers' commentary for clues on the interest rate action from both the U.S. Federal Reserve and the European Central Bank.
Energy shares cushioned the benchmark index to add 0.3%, tracking higher crude prices. [O/R]
UK's FTSE 100 rose 0.6% after data showing a slowdown in Britain's regular wage growth supported hopes of a pause in the Bank of England's tightening cycle.
Among individual stocks, Ericsson (BS:ERICAs) dropped 5.9% to the lowest in six years after the Swedish network equipment provider's fourth-quarter guidance missed expectations and the company flagged uncertainty about recovery of its mobile networks business.
Rival Nokia (HE:NOKIA)'s shares fell 2.8%, dragging the broader telecoms index down 0.8%.
Nordic Semiconductor slumped 20.1% to the bottom of STOXX 600 as the Norwegian chip maker's fourth-quarter revenue forecast missed expectations.
The aerospace and defense index was the top sectoral gainer, up 1.2%, as Rolls-Royce (LON:RR) climbed 1.0% after the British engineering company axed up to 2,500 roles.
Umicore jumped 13.0% to the top of the euro zone blue-chip index after the Belgian chemicals and battery materials group updated its mid-term capital spending outlook.