European stocks closed lower on Tuesday after China’s central bank set the yuan’s official reference point at a stronger than expected level, easing its retaliation to U.S. tariffs, while rejecting Washington’s designation of Beijing as a “currency manipulator.”

The pan-European Stoxx 600 was 0.4% lower at 387.71 during afternoon trade, with household goods stocks — which covers the China-exposed luxury sector — leading the gains. Luxury brands LVMH, Christian Dior and Hugo Boss all saw their shares cross into positive territory.

The People’s Bank of China (PBOC) denied Washington’s allegations of currency manipulation, and set its yuan fixing at 6.9683 per dollar, below the important line of 7 per dollar that it had breached on Monday.

Source : CNBC