Forexpros – European stock markets extended losses on Tuesday, as concerns over the debt crisis in the euro zone following Sunday’s elections in Greece and France overshadowed better-than-expected German industrial production data.
During European afternoon trade, the EURO STOXX 50 tumbled 1.03% and Germany’s DAX 30 plunged 1%, while markets in France remained closed for a national holiday.
Official data showed earlier that industrial production in Germany rose by a seasonally adjusted 2.8% in March, easily surpassing expectations for a 0.8% increase and gaining for the first time in three months.
Industrial production for February was revised to a 0.3% decline from a previously reported drop of 1.3%.
But investors remained cautious after weekend election results in Greece and France raised doubts over Europe’s ability implement austerity measures deemed necessary to tackle the debt crisis in the region.
Market participants were also watching developments in France, where Socialist Francois Hollande is to be inaugurated on May 15. Hollande has said he wants to renegotiate the euro zone fiscal pact in order to stimulate growth in the region.
Financial stocks pushed lower, led by Dutch lender ING Group, down 3.80%, followed by France’s BNP Paribas and Societe Generale, with shares plunging 3.08% and 3.11% respectively.
German lenders were also sharply lower, as shares in Deutsche Bank and Commerzbank tumbled 2.50% and 2.97%, while Spain’s BBVA and Banco Santander erased earlier gains, retreating 0.28% and 1.22%.
Rodrigo Rato stepped down on Monday as chairman of ailing Spanish lender Bankia, helping to clear the way for a rescue plan involving the use of public funds to help troubled Spanish banks. The government hopes this will persuade international investors of Spain’s financial stability.
In London, FTSE 100 declined 0.35%, after data showed that house price balance in the U.K. declined more-than-expected April.
U.K. lenders remained broadly lower, as shares in Barclays dove 4.17% and Lloyds Banking tumbled 2.85%, while the Royal Bank of Scotland plummeted 2.41%.
HSBC Holdings, on the other hand, saw shares advance 1.05% after saying its investment banking division and emerging-market operations helped boost underlying profit in the first quarter, although the bank’s costs remained stubbornly high as wages continued to increase.
Elsewhere, Tullow Oil held gains, jumping 4.63% after announcing that the Ngamia-1 exploration well onshore Kenya in Block 10BB reached an intermediate depth of 1,515 meters and the total net oil pay encountered so far has increased it more than 100 meters across multiple reservoir zones.
Aviva, the U.K.’s second-biggest insurer, also added 0.91% after Andrew Moss stepped down as chief executive officer following investor protests over executive compensation.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to fall of 0.49%, S&P 500 futures signaled a 0.53% decline, while the Nasdaq 100 futures indicated a 0.63% loss.
Later in the day, European Central Bank President Mario Draghi was due to speak in Frankfurt.
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