Investing.com - European stocks remained sharply lower on Tuesday, as uncertainty over whether Spain will ask for help from the European Central Bank's new bond-purchasing program, coupled with the country's high borrowing costs dominated market sentiment.
During European afternoon trade, the EURO STOXX 50 tumbled 1.24%, France’s CAC 40 slumped 1.07%, while Germany’s DAX 30 dropped 0.96%.
Sentiment remained under pressure after Reuters reported earlier that Spanish Prime Minister Mariano Rajoy remains uncertain about asking for help from the ECB's new bond-purchasing program, which would mean signing up to a permanent bailout fund.
Spain's government faced protests over the weekend against public spending cuts, even as Madrid told its European partners that its next steps to overhaul the economy would avoid further cuts in public spending.
Spanish concerns overshadowed data earlier showing that the ZEW Centre for Economic Research's index of economic sentiment for Germany improved more-than-expected in September, ticking up to minus 18.2 from a reading of minus 25.5 the previous month, while the euro zone's index rose to minus 3.8 from minus 21.2, beating expectations for a reading of minus 16.5.
Financial stocks pushed lower, led by Italian lenders Intesa Sanpaolo and Unicredit, down 4.76% and 3.34%, while Spain's BBVA and Banco Santander tumbled 3.33% and 2.40% respectively.
Germany's Deutsche Bank and Commerzbank were also sharply lower, with shares plunging 3.76% and 4.26%, while French banks Societe Generale and BNP Paribas dropped 3.68% and 1.89%.
Elsewhere, auto stocks remained on the downside after a report earlier showed that European car sales fell 8.5% in August, posting an 11th consecutive monthly decline. German groups Volkswagen and BMW plunged 2.57% and 2.53%, while French manufacturers Renault and Peugeot plummeted 3.37% and 4.94%.
In London, FTSE 100 declined 0.74%, weighed by losses in financial stocks, while data showed that consumer price inflation in the U.K. ticked down to 2.5% in August, in line with expectations.
Shares in the Royal Bank of Scotland plunged 2.46% and Barclays dropped 2.24%, while Lloyds Banking and HSBC Holdings retreated 2.23% and 1.77% respectively.
Mining giants Rio Tinto and BHP Billiton were also on the downside, with shares plummeting 2.08% and 2.12%, while copper producers Xstrata and Kazakhmys retreated 0.57% and 2.83%.
Elsewhere, shares in insurance group Aviva plummeted 4.59%, after Deutsche Bank downgraded the stock to "hold" from "buy" and Bank of America cut its rating to "underperform" from "neutral".
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.28% fall, S&P 500 futures signaled a 0.23% decline, while the Nasdaq 100 futures indicated a 0.36% loss.
Also Tuesday, Madrid sold EUR3.56 billion worth of 12-month government bonds, at an average yield of 2.83%, down from 3.07% at a previous auction. The Spanish Treasury also sold EUR1.02 billion worth of 18-month bonds, at a yield of 3.07%, down from 3.33%.
Following the auctions, the yield of Spanish 10-year government bonds was at 5.90%, close to the 6% threshold, widely seen as unsustainable in the long term.
Later in the day, the U.S. was to release official data on the current account, as well as a report on the balance of domestic and foreign investment in long-term securities.
During European afternoon trade, the EURO STOXX 50 tumbled 1.24%, France’s CAC 40 slumped 1.07%, while Germany’s DAX 30 dropped 0.96%.
Sentiment remained under pressure after Reuters reported earlier that Spanish Prime Minister Mariano Rajoy remains uncertain about asking for help from the ECB's new bond-purchasing program, which would mean signing up to a permanent bailout fund.
Spain's government faced protests over the weekend against public spending cuts, even as Madrid told its European partners that its next steps to overhaul the economy would avoid further cuts in public spending.
Spanish concerns overshadowed data earlier showing that the ZEW Centre for Economic Research's index of economic sentiment for Germany improved more-than-expected in September, ticking up to minus 18.2 from a reading of minus 25.5 the previous month, while the euro zone's index rose to minus 3.8 from minus 21.2, beating expectations for a reading of minus 16.5.
Financial stocks pushed lower, led by Italian lenders Intesa Sanpaolo and Unicredit, down 4.76% and 3.34%, while Spain's BBVA and Banco Santander tumbled 3.33% and 2.40% respectively.
Germany's Deutsche Bank and Commerzbank were also sharply lower, with shares plunging 3.76% and 4.26%, while French banks Societe Generale and BNP Paribas dropped 3.68% and 1.89%.
Elsewhere, auto stocks remained on the downside after a report earlier showed that European car sales fell 8.5% in August, posting an 11th consecutive monthly decline. German groups Volkswagen and BMW plunged 2.57% and 2.53%, while French manufacturers Renault and Peugeot plummeted 3.37% and 4.94%.
In London, FTSE 100 declined 0.74%, weighed by losses in financial stocks, while data showed that consumer price inflation in the U.K. ticked down to 2.5% in August, in line with expectations.
Shares in the Royal Bank of Scotland plunged 2.46% and Barclays dropped 2.24%, while Lloyds Banking and HSBC Holdings retreated 2.23% and 1.77% respectively.
Mining giants Rio Tinto and BHP Billiton were also on the downside, with shares plummeting 2.08% and 2.12%, while copper producers Xstrata and Kazakhmys retreated 0.57% and 2.83%.
Elsewhere, shares in insurance group Aviva plummeted 4.59%, after Deutsche Bank downgraded the stock to "hold" from "buy" and Bank of America cut its rating to "underperform" from "neutral".
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.28% fall, S&P 500 futures signaled a 0.23% decline, while the Nasdaq 100 futures indicated a 0.36% loss.
Also Tuesday, Madrid sold EUR3.56 billion worth of 12-month government bonds, at an average yield of 2.83%, down from 3.07% at a previous auction. The Spanish Treasury also sold EUR1.02 billion worth of 18-month bonds, at a yield of 3.07%, down from 3.33%.
Following the auctions, the yield of Spanish 10-year government bonds was at 5.90%, close to the 6% threshold, widely seen as unsustainable in the long term.
Later in the day, the U.S. was to release official data on the current account, as well as a report on the balance of domestic and foreign investment in long-term securities.