Investing.com - European markets opened sharply lower on Tuesday, taking their cue from U.S. and Asian equities as investors remained spooked since late last week by climbing bond yields.
The EURO STOXX 50 lost 2.03%, France’s CAC 40 tumbled 2.13%, while Germany’s DAX 30 was down 2.23% by 03:35 a.m. ET (07:35 GMT).
Traders were also cautious as coalition negotiations were set to continue in Germany between Chancellor Angela Merkel's conservative camp and the Social Democrats, after talks broke down over the weekend.
Financial stocks were sharply lower, as French lenders Societe Generale (PA:SOGN) and BNP Paribas (PA:BNPP) tumbled 2.73% and 2.71%, while Germany's Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn) plunged 3.39% and 2.91%.
Earlier Tuesday, BNP Paribas reported a worse than expected net profit of €1.43 billion for its fourth quarter of 2017.
Among peripheral lenders, Italy's Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) declined 0.66% and 2.40% respectively, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) lost 2.20% and 2.01%.
Intesa Sanpaolo earlier announced an increase in fourth-quarter and full-year net profits, beating analysts projections.
Elsewhere, shares in Thyssenkrupp (DE:TKAG) retreated 2.74% even though the German company's steel workers voted on Monday in favour of a labour agreement that will safeguard jobs and plants in a planned joint venture with Tata Steel until 2026.
In London, FTSE 100 tumbled 2.17%, weighed by Vodafone (LON:VOD), whose shares sank 4.04% after the telecommunications giant confirmed that it is in talks to buy a tranche of European cable assets from Liberty Global (NASDAQ:LBTYA).
Mining companies added to losses on the commodity-heavy index. Shares in Fresnillo (LON:FRES) dropped 0.46% and Glencore (LON:GLEN) declined 1.87%, while Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT) retreated 2.08% and 2.71% respectively.
Gold miner Randgold Resources (LON:RRS) overperformed however, with shares up 0.55% after the company doubled its full-year dividend while warning about upcoming regulations in one of its key jurisdictions.
Financial stocks were also on the downside, as HSBC Holdings (LON:HSBA) tumbled 1.53% and Lloyds Banking (LON:LLOY) plummeted 2.26%, while Barclays (LON:BARC) and the Royal Bank of Scotland (LON:RBS) lost 2.78% and 2.88% respectively.
In other news, a fresh round of Brexit talks were set to begin on Tuesday. Chief Brexit negotiator for the European Union Michel Barnier told the U.K. on Monday that the time had now come to decide on the type of relationship Britain wants with the bloc after it leaves the EU.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.25% rise, S&P 500 futures signaled a 0.83% gain, while the Nasdaq 100 futures indicated a 0.98% jump.