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European stocks drop amid debt talks; DAX down 0.71%

Published 11/29/2011, 04:03 AM
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Investing.com - European stock markets were sharply lower on Tuesday, as investor confidence weakened amid sustained concerns over the euro zone’s debt crisis ahead of a meeting of European finance ministers.

During European morning trade, the EURO STOXX 50 tumbled 1.14%, France’s CAC 40 declined 1.12%, while Germany’s DAX 30 slid 0.71%.

Euro zone finance ministers were to meet later on Tuesday to approve detailed arrangements for scaling up the European Financial Stability Facility. They were also expected to release Greece’s next tranche of financial aid.

Meanwhile, investors were jittery after reports that Standard & Poor's could change France's triple-A rating outlook to negative within days, while Moody's warned it could downgrade the subordinated debt of 87 banks across 15 European countries.

Financial stocks were sharply lower after the news, as shares in French lender Societe Generale tumbled 3.65% and BNP Paribas slumped 3.51%, while Germany’s Deutsche Bank declined 2.24%.

Peripheral lenders contributed to losses, with Spanish banks Banco Santander and BBVA dropping 1.75% and 2.02%, while Italy’s Intesa Sanpaolo and Unicredit plummeted 1.30% and 2.31%.

On the upside, the maker of Remy Martin cognac, Remy Cointreau climbed 2.41% after the company forecast “a substantial increase” in full-year earnings. Remy Cointreau also posted first-half current operating profit that jumped 27%, topping analysts’ estimates.

In London, FTSE 100 declined 0.66%, as U.K. lenders tracked their European counterparts lower.

Shares in the Royal Bank of Scotland plunged 2.99% and Lloyds Banking slumped 2.26%, while Barclays and HSBC Holdings dropped 1.86% and 1.61% respectively.

The mining sector also added to losses as shares in Rio Tinto and Bhp Billiton dove 2.34% and 1.61%, while Xstrata and Kazakhmys dropped 1.87% and 0.82%.

Meanwhile, G4S Plc, the world’s largest security company, added 0.79% after HSBC Holdings upgraded the stock to “overweight” from “neutral.”

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a drop of 0.19%, S&P 500 futures signaled a 0.13% fall, while the Nasdaq 100 futures indicated a 0.23% decline.

Later in the day, the U.S. was to release industry data on house price inflation as well as a report on consumer confidence.

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