Investing.com – European stock markets traded mostly lower on Tuesday as political issues throughout the euro zone weighed on sentiment and banks were under pressure after an analyst downgrade.
Nearing midday trade in Europe, the benchmark Euro Stoxx 50 fell 0.22%, France’s CAC 40 lost 0.49% while Germany’s DAX 30 traded flat.
As the snap elections in the U.K. set for June 8 reared their head, the two main candidates for British Prime Minister outlined their plans for negotiations with the European Union (EU) over the Brexit, as Britain’s exit from the group is known.
Current Prime Minister Theresa May repeated her opinion that no deal with the EU was better than a bad deal, while opposition leader Jeremy Corbyn promised that a deal would go through if he won the elections.
With Germany set to hold elections next September, former Italian Prime Minister Matteo Renzi suggested that holding Italy’s elections at the same time would be appropriate.
Market players are watching to see if German Chancellor Angela Merkel holds her power, while also looking towards Italy to gauge the rise of populist movements.
Over in Greece, a government spokesperson denied reports that Athens would opt out of the next bailout payment if its international creditors failed to reach an agreement on debt relief. Greece is hoping that some deal can be reached at a meeting of euro zone finance ministers to be held in June.
On the economic front, inflation in Spain dropped more than expected in May to 1.9%, while investors looked ahead to the reading on prices from the motor of the euro zone economy. Germany’s inflation is expected to have fallen from 2.0% to 1.6% this month.
The data arrives after European Central Bank (ECB) president Mario Draghi repeated Monday that inflation pressures remained subdued and the ECB still saw the need for extraordinarily accommodative monetary policy.
In positive news for the euro area’s second largest economy, French GDP was unexpectedly revised up to 0.4% in the first quarter.
To the downside, the euro zone business and consumer survey unexpectedly slipped to 109.2 in May, missing expectations for a slight increase to 110.0.
In company news, European banks were under pressure after Deutsche Bank cut the sector to “underweight” due to valuations and their forecast that euro area growth was losing momentum.
After the U.K. bank holiday on Monday, London-listed shares of IAG (LON:ICAG) sank nearly 3% while returning to trading after a computer failure at British Airways (BA) over the long-holiday weekend caused cancellations, affecting thousands of passengers.
London Stock Exchange Group (LON:LSE) agreed Tuesday to buy The Yield Book, Citigroup 's (NYSE:C) fixed-income analytics and indexing business, for $685 million in cash.
Meanwhile, oil prices fell on Tuesday as concerns about oversupply continued to weigh, despite the American summer driving season getting underway.
Energy stocks traded mixed, as French oil and gas major Total SA (PA:TOTF) dropped 0.07%, Italy’s ENI (MI:ENI) rose 0.49%, while Norwegian rival Statoil (OL:STL) was unchanged.
Financial stocks traded mostly lower, as French lenders BNP Paribas (PA:BNPP) lost 0.27% though Societe Generale (PA:SOGN) advanced inched up 0.02%, while Germany’s Commerzbank (DE:CBKG) and rival Deutsche Bank (DE:DBKGn) fell 0.15% and 0.94%, respectively.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) was unchanged and Unicredit (MI:CRDI) lost 0.25%, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) advanced 0.01% and 0.29%, respectively.
In London, the commodity-heavy FTSE 100 returned after a three-day weekend with losses of 0.33%.
Shares in Glencore (LON:GLEN) rose 0.70%, Anglo American (LON:AAL) gained 0.43% and BHP Billiton (LON:BLT) advanced 0.12%. To the downside, Rio Tinto (LON:RIO) gave up 0.19%.
Energy stocks recorded gains, as BP (LON:BP) rose 0.34% and rival Royal Dutch Shell (LON:RDSa) traded up 0.13%.
Financial stocks were mixed, with shares in HSBC Holdings (LON:HSBA) and Royal Bank of Scotland (LON:RBS) up 0.30% and 0.42%, respectively, while Lloyds Banking (LON:LLOY) fell 0.27% and Barclays (LON:BARC) lost 0.78%.
In the U.S., futures pointed to a flat open. The Dow Jones Industrial Average futures slipped 0.04%, S&P 500 futures inched down 0.0%, while the Nasdaq 100 futures edged forward 0.01%.