London equities closed down Tuesday as disappointing US data dampened positive sentiment earlier brought on by better than expected American blue-chip earnings and news that China may move to stimulate its massive economy.

After an initial positive session the FTSE 100 index entered negative territory in afternoon trade, ending down 0.39 percent at 6,597.44 points.

The birth of the royal baby appeared to provide only slender support, though analysts at The Centre for Retail Research predicted a "baby boost" to the British retail sector of around ??243 million.

Elsewhere in Europe Frankfurt's DAX 30 shed 0.20 percent to 8,314.23 points and the CAC 40 in Paris dropped 0.43 percent to 3,923.09 points.

"European markets did start the day on the front foot this morning buoyed by a positive Asia session," CMC Markets UK analyst Michael Hewson said, but added that "the only economic data of note was the Richmond Fed manufacturing index for July, which missed expectations by a mile".

Earlier Tuesday, comments made by Chinese Premier Li Keqiang boosted stocks.

Quoted by a state-backed newspaper, Li said the "bottom line for economic growth is seven percent". The remarks were then interpreted by analysts as a hint that Beijing would move to prop up growth.

Dealers said Li's comments also sent the mining sector soaring since China is a key consumer of metals.

In London, shares in resource giant Glencore Xstrata rallied 5.09 percent -- 13.7 pence -- to 282.7 pence while Anglo-Australian miner Rio Tinto was the second biggest climber, jumping 3.36 percent -- 97.5 pence -- to 3,000.

Tullow Oil was the biggest faller, however, shedding 6.64 percent -- 74 pence -- to 2,041. It was followed by chemicals company Croda International which fell 4.67 percent -- 120 pence -- to 2,449.

Lloyds Banking Group was the most traded stock, with 133.24 million units changing hands, followed by Vodafone with 78.85 million.

On the currency markets, the pound stood at $1.5365 at 5.25pm, up from $1.5267 at around the same time Monday, while it slipped to 1.6260 euros from 1.1646 euros over the same period.