Forexpros – European stock markets closed in a sea of red Tuesday, despite improved sentiment built upon data indicating the euro zone avoided a recession in the first quarter as worries over Greece’s political stalemate.
At the close of European trade, the EURO STOXX 50 dropped 1.06%, France’s CAC 40 gave back 0.61%, the FTSE 100 fell 0.51%, while Germany’s DAX 30 slumped 0.79%.
Stocks plunged after Panos Kammenos, the leader of a conservative party which opposes Greece’s international bailout, stated political talks had ended without a deal.
An interim government will be appointed Wednesday, with new elections likely in early June. The announcement fuelled fears over the country’s ability to uphold its financial commitments and its possible exit from the euro zone.
Helping stem the equity losses, government data indicated that the euro zone avoided a recession in the first quarter, as gross domestic product growth remained flat, defying expectations for a contraction of 0.2%. However, the region’s economy contracted by 0.3% in the fourth quarter of 2011.
Stock sentiment also found support after preliminary data showed that Germany’s economy expanded more-than-expected in the first quarter, indicating that the euro zone’s largest economy is weathering the effects of the crisis in the region.
Meanwhile in Britain, official data showed that the U.K.’s trade deficit remained unexpectedly unchanged in March.
France’s BNP Paribas rose 0.22% and 0.33%, while German Deutsche Bank added 0.23%.
French mass media group Vivendi was one of the session’s top gainers, with shares surging 4.02%, although it posted lower revenue and operating profit in the first quarter, hit by weak video game sales and bruising competition for its SFR French telecom unit after the launch of a new low-cost mobile player.
Shares in mining giant Anglo American advanced 0.70%, after announcing the appointment to its Board of Anne Stevens as a non-executive director, with immediate effect, while BP saw shares rise 0.37%:
Rio Tinto turned lower however, declining 0.76%, while Bhp Billiton added 0.13%. Copper producers Xstrata and Kazakhmys also erased earlier gains, falling 0.27% and 1.29% respectively.
Elsewhere, U.K. lenders turned broadly lower. Shares in Barclays tumbled 1.92% and Lloyds Banking retreated 0.54%, while the Royal Bank of Scotland fell 0.37%.
Earlier in the day, Barclays said that it was putting its French retail banking network up for sale, following an estimated loss of EUR200 million.
In the U.S., equity markets traded higher with the Dow Jones Industrial Average adding 0.37%, S&P 500 increasing 0.43%, while the tech heavy Nasdaq gaining 0.91% in midsession trade.
Investors are looking forward to European Central Bank President, Mario Draghi speaking, the U.S. FOMC meeting minutes and Japanese GDP on Wednesday.
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