Weak earnings trumped strong economic data for European stocks on Tuesday, as investors took their cue from banking giant HSBC's (HSBA.L) surprise slump in profits rather than stellar reports on the euro zone economy. Europe's benchmark index of 300 leading shares .FTEU3 fell 0.2 percent to 1,459 points, with the region's banking index down as much as 2 percent in early trade .SX7P. The biggest drag was British-based HSBC, Europe's largest bank by assets. Its shares fell 6 percent, on track for their biggest fall since August 2015, after the bank said pre-tax profits last year slumped 62 percent, far more than analysts had expected. The dollar gained ground on the world's major currencies, in line with a tentative move back up in U.S. bond yields ahead of minutes from the Federal Reserve's latest meeting which could offer signals on the future pace of interest rate hikes. "HSBC's largely disappointing set of results are weighing on the stock price, the sector, and markets in general," said David Cheetham, chief market analyst at XTB. Britain's FTSE 100 .FTSE bore the brunt of London-listed HSBC's troubles, falling 0.4 percent. That was double the decline on France's CAC 40 .FCHI, while Germany's DAX .GDAXI was up 0.1 percent. "HSBC is the first of several major UK banks to report this week, and given this morning's miss there will likely be greater levels of caution heading into Lloyds, Barclays and RBS's results in the coming days," XTB's Cheetham said. MSCI's world stock index slipped 0.1 percent .MIWD00000PUS and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was also down 0.1 percent, consolidating below a 19-month peak hit last Thursday. China's blue-chip index .CSI300 rose to its highest in over two months on Tuesday, extending gains from Monday - its best day in six months - on reports that pension funds will begin pumping funds into the country's stock markets. With U.S. markets closed for the Presidents Day holiday on Monday, Asian markets had few global cues off which to trade. U.S. futures point to a rise of around 0.1 percent at the open on Wall Street ESc1 DJc1.
