UKX FTSE 100 Index

By Sara Sjolin, MarketWatch

Car makers and oil giants lead decliners

European stock markets broke a five-session winning run on Tuesday, with car makers and oil giants leading decliners on the back of a Volkswagen AG trading update and a slump in oil prices.

The Stoxx Europe 600 index fell 0.2% to 349.43, after a wobbly start to the day. For May, however, the pan-European benchmark was set for a 2.3% advance, which would be its best monthly performance since November.

The index rose 0.1% on Monday in thin trade, as markets in the U.K. and U.S. were closed for holidays.

Economic news: Stocks in Europe stayed lower after data showed eurozone inflation improved slightly in May, but remained in negative territory (http://www.marketwatch.com/story/eurozone-stays-mired-in-deflation-in-may-2016-05-31). The flash consumer-price index rose to negative 0.1% from negative 0.2% in April, while the core reading -- which strips out the volatile energy, food and alcohol and tobacco segments -- rose to 0.8% from 0.7%. Both numbers met forecasts.

The data are seen as unlikely to push the European Central Bank to make any changes to monetary policy when it meets on Thursday, as the bank has already launched an aggressive easing program and driven deposit rates into negative territory.

The euro traded at $1.1130, unchanged from ahead of the data.

"The reason we have not seen much move for the euro is because investors are not expecting much reaction from [ECB President Mario] Draghi, and only a lousy inflation number could have paved the way for a more exciting meeting," said Naeem Aslam, chief market analyst at ThinkForex, in a note.

"All eyes will be on Draghi now and how [he] will strike a balance between hawkish and dovish tone," Aslam added.

Eurozone unemployment remained at 10.2% in April, in line with expectations. Unemployment in Germany in May fell to 6.1% -- the lowest level since the country's reunification.

Movers: Shares of Volkswagen (VOW.XE) (VOW.XE) lost 3.1% after the car maker reported a 20% drop in profit (http://www.marketwatch.com/story/volkswagen-back-in-profit-after-huge-2015-loss-2016-05-31) for the first quarter, missing analyst forecasts. However, the profit was still an improvement from its record full-year loss in 2015, indicating that the auto company has digested most of the financial pain from its emissions-cheating scandal.

Other car makers followed VW lower, with shares of BMW AG (BMW.XE) off 0.8% and Peugeot SA (UG.FR) down 1.2%.

Statoil ASA (STL.OS) gave up 1% after RBC Capital Markets cut the Norwegian oil giant to underperform from sector perform.

Shares of Aryzta AG (ARYN.EB) slumped 5.9% after the Swiss frozen-food company said quarterly revenue fell 2.4%.

Oil blues: Oil companies were also moving lower, as Brent struggled to stay above the $50 handle. The July contract was down 1% at $49.88, while crude was slightly higher at $49.38.

Shares of BP PLC (BP.LN) (BP.LN) gave up 1.9%, Total SA (TOT) (TOT) fell 0.6%, and Eni SpA (ENI.MI) dropped 0.4%.

Indexes: Germany's DAX 30 index slipped 0.2% to 10,310.11, while France's CAC 40 index dropped 0.2% to 4,519.46.

The U.K.'s FTSE 100 index lost 0.1% to 6,262.63 (http://www.marketwatch.com/story/ftse-100-propelled-higher-by-strong-asian-lead-2016-05-31).

(END) Dow Jones Newswires

May 31, 2016 05:35 ET (09:35 GMT)

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