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European stocks lower with U.S. shutdown, ECB in focus; Dax down 0.6%

Published 10/02/2013, 03:57 AM
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Investing.com - European stock markets were broadly lower on Wednesday, amid ongoing concerns over a U.S. government shutdown and as investors looked ahead to the outcome of the European Central Bank’s latest policy meeting.

During European morning trade, the EURO STOXX 50 fell 0.55%, France’s CAC 40 dropped 0.9%, while Germany’s DAX 30 lost 0.7%.

Investors remained cautious as worries over the impact of a U.S. government shutdown continued after Congress failed to reach an agreement on a budget bill.

The shutdown was expected to delay economic data releases this week, including Friday's highly-anticipated non-farm payrolls report.

Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.

Meanwhile, in the euro zone, traders were awaiting the outcome of the ECB’s latest policy meeting and press conference with President Mario Draghi later in the day.

Market players also continued to monitor political developments in Italy, with Prime Minister Enrico Letta due before parliament for a vote of confidence on Wednesday.

Italian lenders Unicredit and Intesa Sanpaolo were higher by 1.25% and 2.3% respectively.

In London, the commodity-heavy FTSE 100 tumbled 1%, weighed by losses in the mining sector. BHP Billiton and Rio Tinto slumped 1.3% and 1.6% respectively, while Glencore Xstrata and Randgold Resources lost 1.6% and 1.7%.

Supermarket chain Tesco was one of the worst performers on the index, down 4.4%, after the company reported a drop in first-half net profit.

Consumer-goods maker Unilver declined for the second consecutive day, losing 1.5% after UBS cut its rating on the stock to ‘neutral’ from ‘buy. On Tuesday, Unilver said sales growth slowed in the third quarter.

Across the Atlantic, U.S. equity markets pointed to a lower open, as investors grew increasingly concerned over political wrangling in Washington.

The Dow Jones Industrial Average futures pointed to a loss of 0.6%, S&P 500 futures signaled a 0.7% drop, while the Nasdaq 100 futures indicated a 0.55% decline.

Later in the session, the U.S. was to release the ADP report on nonfarm payrolls.

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