European stocks were down on Tuesday, as investors responded poorly to earnings from HSBC and BHP Group while trade negotiations between the U.S. and China continue in Washington.

HSBC Holdings PLC lost 3% after a disappointing set of annual results.

How are markets performing?

The Stoxx Europe 600

SXXP, -0.45%

lost 0.4% to 368.32 on Tuesday, after the index climbed by 0.2% on Monday.

Italy’s FTSE MIB

I945, -0.68%

 led the region’s decliners losing 0.9% to 20,142.77. The FTSE 100

UKX, -0.52%

followed, dropping 0.5% to 7,187.13.

France’s CAC 40

PX1, -0.44%

lost 0.3% to 5,151.31, while Spain’s IBEX 35

IBEX, -0.53%

 lost 0.3% and Germany’s DAX

DAX, +1.63%

 fell by 0.2% to 11,272.50.

The euro

EURUSD, -0.2564%

remained flat on Tuesday, at $1.1307, as did the pound

GBPUSD, -0.0851%

at $1.2927.

What’s driving the markets?

The markets mainly reacted to the latest set of company earnings from heavyweights HSBC Holdings PLC

HSBC, +1.01%

HSBA, -3.95%

HSBA, -3.95%

and the world’s largest listed miner by market value BHP Group

BHP, -0.93%

HSBC Holdings PLC

HSBC, +1.01%

HSBA, -3.95%

reported lower than expected fourth-quarter profits, leading to a 3% drop in the share price. The full results show that the bank secured a full-year net profit of $12.6 billion, less than the $13.71 billion analysts expected.

Newly appointed HSBC chief executive John Flint said that the bank had been on track to meet targets until revenues collapsed in parts of the bank in November. He said it was “very much a fourth-quarter problem” and that the bank started 2019 in a “fundamentally different” position.

Results from other U.K. banks are expected later this week, including Lloyds Banking Group PLC

LLOY, -0.21%

which added 0.4% on Tuesday, and Barclays PLC

BARC, -0.25%

which stayed mostly flat.

BHP Group

BHP, -0.93%

also failed to impress investors, despite 87% rise in first-half net profits to $3.76 billion, leading to a 1.2% drop in the share price. “Its results have missed expectations on multiple metrics after a series of production issues at some of its copper and iron ore mines. Rising costs have also been an issue.” Russ Mould, investment director at AJ Bell said.

In Washington, U.S.-China trade negotiations continue, with President Donald Trump reportedly pursuing an ambitious makeover for U.S. commercial ties. However, investors are still concerned about the progress made on contentious issues such as Washington’s dissatisfaction over Chinese technology and trade policies.

Meanwhile, data from the Ifo Institute showed that although Germany’s current account surplus shrank, it remained the world’s largest net exporter, Reuters reported.

What stocks are active?

In other active stocks, Wirecard AG

WDI, +3.89%

 remained in the top spot for Europe after Monday’s surge, with shares climbing by 8%.

German building materials provider HeidelbergCement AG

HEI, +3.53%

 added 4%, after the it announced a rise in fourth-quarter revenue fueled by higher sales.

InterContinental Hotels Group PLC

IHG, +1.50%

 added 2%, after the owner of the Crowne Plaza and Holiday Inn hotel brands said revenues increased to $4.34 billion from $4.08 billion a year before.

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