European markets retreat from China stimulus rally; Brandy makers slump on tit-for-tat tariffs

This is CNBC's live blog covering European markets.

European markets were lower Tuesday afternoon as regional sentiment soured further after a shaky start to the week, with investors responding to a slowdown in China's stimulus rally.

The pan-European Stoxx 600 was down 0.48% by early afternoon, with all major bourses and the majority of sectors trading in the red. Mining stocks shed 3.8% while household goods fell 1.25%.

European drinks makers LVMH, Pernod Ricard and Diageo slumped lower Tuesday after China announced temporary anti-dumping measures on European brandy imports, days after the EU's vote on EV tariffs.

It comes amid a wider slump in luxury and mining stocks, as sentiment turned negative on a potential demand boost from stimulus measures in the key Chinese market.

Elsewhere overnight, U.S. stock futures were little changed following a losing day on Wall Street Monday as rising oil prices and bond yields weighed on markets.

In the Asia-Pacific region, an initial rally for Chinese markets lost steam after a briefing from the country's National Development and Reform Commission provided few details on further stimulus.

Earlier, mainland China's CSI 300 index had skyrocketed over 10% at the open at its return from the Golden Week holiday, but the index pared gains later in the session.

Key releases for markets this week include U.S. Federal Reserve minutes and German trade on Wednesday, U.S. inflation on Thursday and U.K. economic growth on Friday.

Consumers looking for 'little sweet treats' in uncertain times, Software AG says

Neil Ponting, director for U.K., Ireland & South Africa at Software AG, says discretionary consumer spending is on the rise, even as economic uncertainty remains.

"We're seeing this trend of little sweet treats ... just to treat themselves to give them a little boost. But they're staying away from those big spends," Ponting told CNBC's "Squawk Box Europe."

It comes after fresh data released Tuesday by the British Retail Consortium (BRC) showed retail sales rose 2% year-on-year last month, rising above the three-month average.

— Karen Gilchrist

Telecoms and utilities tick higher

Telecoms and utilities stocks led a shift into the green for certain sectors, as souring sentiment around China's stimulus plans eased.

Telecoms were up 0.46%, and utilities were 0.18% higher by 12:40 p.m. London time, while travel and leisure stocks ticked 0.1% higher.

— Karen Gilchrist

China tariffs send European brandy makers lower

European drinks makers LVMH, Pernod Ricard and Diageo slumped lower Tuesday after China announced fresh tariffs on European brandy imports, days after the EU's vote on EV tariffs.

LVMH and Pernod Ricard were both down more than 3% and Diageo was around 2% lower as the brandy producers winced at new tariffs which will make their products cost more in the key Chinese market.

The tit-for-tat measures follow the EU's Friday vote for tariffs on Chinese-made electric vehicles (EVs) amid concerns Chinese subsidies are undercutting European carmakers.

It comes amid a wider slump in European stocks, and particularly the luxury sector, after optimism cooled around a Chinese stimulus package announced last week.

— Karen Gilchrist

Mining stocks slump, on track for worst daily loss since in 18 months

European miners tumbled 4.6% on Tuesday morning, as the China stimulus rally continued to lose steam, leaving the sector on course for its worst daily loss since March 2023, when stocks plunged over 5.6%.

Shares of Anglo American, Antofagasta and Rio Tinto were all more than 5% lower by 9:50 a.m. London time.

— Karen Gilchrist

UK finance minister on 'tight guard rails' with Autumn Budget, Edison Group says

U.K. Finance Minister Rachel Reeves is on "tight guard rails" with her upcoming Autumn budget and is unlikely to roll out any unfunded plans, Neil Shah, director of research at Edison Group, told CNBC Tuesday.

"Given her position of restraining spending ... she's on pretty tight guard rails. In the event, I think we're going to get [the Budget] out of the way and then get a focus back on the fundamentals," he told "Squawk Box Europe."

— Karen Gilchrist

France's CAC and UK's FTSE slump 1% as China rally fades

France's CAC 40 and the U.K.'s FTSE 100 both shed around 1% in morning deals as China's stimulus rally faded following the reopening of markets in mainland China.

Germany's DAX and Italy's FTSE MIB were also both down more than 0.5% on waning hopes for China's economic resurgence after a briefing from the country's National Development and Reform Commission provided few further details on the plans.

— Karen Gilchrist

UK homebuilder Vistry tanks 28% on profit warning

U.K. housebuilder Vistry slumped to the bottom of the Stoxx 600 after saying its full-year profits will be nearly one-fifth lower than expected due to unexpected building costs within some of its projects.

The added costs stem primarily from projects in its southern division and led the firm to reduce its expectations for 2024 adjusted pre-tax profit by £80 million, with added costs expected over the next two years. It now expects adjusted pre-tax profit to be around £350 million for the year.

The firm's shares were last trading 28% lower as of 8:52 a.m. London time.

— Karen Gilchrist

LVMH and Kering shares slump as luxury sector pulls back from China rally

Shares of LVMH and Kering fell at the market open as luxury stocks pulled back from a China stimulus rally.

LVMH was down 3.84% and Kering was 5.05% lower by 8:15 a.m. as markets in mainland China reopened following the mid-Autumn Festival and turned sour on a stimulus package announced last week.

Luxury companies, hard hit by a slump in Chinese consumer spending, had hoped to benefit from China's economic recovery. Burberry also shed 5.9% while Christian Dior was down 3.8%.

European markets open lower

European markets opened lower Tuesday as regional sentiment sours further after a shaky start to the week.

The pan-European Stoxx 600 was down 0.81% in early deals, with all sectors and major bourses trading in the red. Mining stocks shed 3.65% while household goods fell 2.1%.

— Karen Gilchrist

Oasis ticket sales fuel discretionary spending as UK retail sales jump

U.K. discretionary spending shot up in September, with consumers forking out on Oasis tickets and other non-essentials, even as the upcoming government Budget weighs on consumer confidence.

Retail sales rose 2% year-on-year last month, rising above the three-month average, as shoppers hit the high street to update their wardrobes, fresh data released Tuesday by the British Retail Consortium (BRC) showed.

"Retail sales saw the strongest growth in six months as non-food performed better than expected. As autumn rolled out across the UK, shoppers sought to update their wardrobes with coats, boots and knitwear," BRC CEO Helen Dickson said.

It coincides with the release of Barclays' consumer card report, which showed the fastest growth in non-essential spending this year, with a 2.7% year-on-year increase in September. It attributed it to a 36% annual jump in spending on concerts and shows, including the Oasis brothers' forthcoming 2025 tour.

— Karen Gilchrist

October is a good time to use 'healthy' pullbacks to add to positions, Piper Sandler says

October is traditionally a volatile month, but Piper Sandler believes that investors can use the market's actions to their advantage.

"Historically, October tends to be a 'backing and filling' month as investors react to the Q3 earnings season results. We would continue to use 'healthy' pullbacks to add to positions, especially among leading SMID-caps in the Industrial, Financial, and Technology sectors," the investment firm wrote in a Monday note.

In the note, Piper Sandler stood by its year-end S&P 500 target of 5,800. This implies that the broad market index could rise less than 1%.

— Lisa Kailai Han

Stock futures inch higher

Stock futures were slightly up shortly after 6 p.m. ET.

Dow and S&P 500 futures rose around 0.1% each. Nasdaq 100 futures added 0.2%.

— Alex Harring

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European markets: Here are the opening calls

European markets are expected to open in mixed territory Tuesday.

The U.K.'s FTSE 100 index is expected to open 47 points lower at 8,302, Germany's DAX down 181 points at 18,915, France's CAC 77 points lower at 7,501 and Italy's FTSE MIB up 220 points at 33,814, according to data from IG.

Earnings are set to come from OMV and data releases include the BRC retail sales monitor, German industrial production and France's latest trade balance.

— Holly Ellyatt