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European stocks fell Tuesday as investors were concerned about rising energy prices and a weak economic outlook after data showed that business activity in the region declined this month, Reuters reported.

The survey showed that business activity in the euro zone declined for a second straight month in August as the cost-of-living crisis forced consumers to cut spending and supply constraints hurt manufacturers.

In Germany, the decline deepened in August as companies faced weaker demand due to high inflation, rising interest rates and economic uncertainty.

The problems for the French and German economies are mounting as fresh data show that demand has fallen because of a toxic combination of factors, said Suzanne Streeter, senior investment and markets analyst at Hargreaves Lansdown.

But investors seem to have grasped the data, which point to some easing of supply growth and input cost inflation. Hopes that there may be some respite in sight seem to have helped consumer cyclical stocks in particular.

Auto and bank stocks were up 1.0% and 0.3%, while energy was up 1.3% as oil prices rose on supply shortage concerns.

European Union benchmark gas prices rose 13% overnight to a record peak, doubling in just one month and 14 times the average over the past decade. At the end of the month, Russia will suspend gas supplies to Europe via the Nord Stream 1 pipeline for three days.

Overall, uncertainty reigns in European markets as fears that the energy crisis could worsen, Streeter added.

Analysts say market nervousness will persist ahead of Friday's meeting of global central bank governors in Jackson Hole as investors await hints from U.S. Federal Reserve Chairman Jerome Powell about the future path of monetary policy in the world's largest economy.

Shares of German utility Uniper SE rose 1.4 percent after it said it will start producing electricity for the market at its Heyden 4 coal-fired power plant, as a three-day suspension of Russian gas supplies to Europe could lead to power outages.

Shares of Alcon AG rose 0.9 percent after it announced it would acquire Aerie Pharmaceuticals in a deal worth about $753 million.

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