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European Stocks Close Lower After U.S. Inflation Print; Banking Stocks Fall; Deutsche Bank Tanks 9%

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  • Reports on Monday indicated that an undisclosed investor had sold large stakes in Germany's biggest lenders, Deutsche Bank and Commerzbank.
  • Russia's invasion of the country has caused volatility in oil and other commodities markets, which has, in turn, disturbed stocks.
  • Overnight, U.K. Foreign Secretary Liz Truss said her government was working "urgently" to verify details of an alleged chemical weapons attack in the besieged Ukrainian city of Mariupol.

LONDON — European markets closed lower Tuesday as traders monitored heavy selling in the banking sector and U.S. inflation data, and looked ahead to key central bank meetings.

The pan-European Euro Stoxx 600 index provisionally ended 0.3% lower after clawing back some earlier losses.

The German DAX dropped 0.5% with the banking sector falling 1.5%. Reports on Monday indicated that an undisclosed investor had sold large stakes in Germany's biggest lenders, Deutsche Bank and Commerzbank.

Shares of Deutsche Bank were down 9.4% and Commerzbank was down 8.5%. The former said in statement that it remained "confident in our strategy." The reports said the sale amounts to 116 million shares of Deutsche Bank and 72.5 million shares of Commerzbank — more than 5% of the two German banks.

Nigel Bolton, co-chief investment officer of BlackRock Fundamental Equities, wouldn't comment on individual stock news but said traders need to keep an eye on large investor flows.

"When you look at the equity markets at the moment I do think there are some attractive areas, actually European banks are looking incredibly cheap now," he told CNBC's "Squawk Box Europe."

"And in an environment where you are starting to see rising rates, as long as you don't think we're going to move into a sort of recessionary environment in a year or two out, then actually they can look relatively attractive," he said.

U.S. inflation

On Wall Street, U.S. stocks rose as the March consumer prices report showed inflation excluding volatile food and energy costs was slightly less than expected. A drop in rates often helps to boost stocks.

Earnings season also kicks off stateside this week, with banking giants JPMorgan, Goldman Sachs, Wells Fargo, Citi and Morgan Stanley all due to report.

Back in Europe, investors will also keep an eye on developments in Ukraine. Russia's invasion of the country has caused volatility in oil and other commodities markets, which has, in turn, disturbed stocks.

Overnight, U.K. Foreign Secretary Liz Truss said her government was working "urgently" to verify details of an alleged chemical weapons attack in the besieged Ukrainian city of Mariupol.

European Central Bank policymakers will meet in Frankfurt on Thursday to discuss their next monetary policy move, faced with the tough task of weighing surging consumer prices against downward pressure on economic growth from the war in Ukraine.

On the data front, U.K. employment figures showed that the country's jobless rate fell to its lowest level since 2019.

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— CNBC's Elliot Smith contributed to this article.

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