Europe's main stock markets retreated further on Tuesday as Ukraine-Russia tensions and the IMF cutting its forecast for global growth offset robust British manufacturing data.
London's FTSE 100 dropped 0.49 percent to close 6,590.69 points, while in Paris the CAC 40 shed 0.25 percent to 4,424.83 points and the DAX 30 in Frankfurt gave up 0.21 percent to 9,490.79 points.
Investors were hesitant ahead of the start of the US corporate earnings season on Tuesday evening, said analysts.
"The poor weather has already had an impact on US indicators in the first quarter and there are concerns that this could carry over into company earnings, said analyst Alexandre Baradez at brokers IG.
Analyst Christopher Dembik of Saxo Banque in Paris agreed investors were taking a wait-and-see attitude before seeing the trend for US corporate earnings and noted "the geopolitical situation in Ukraine doesn't encourage taking any risks."
Russia warned Kiev on Tuesday that any use of force in Ukraine's east, where pro-Kremlin militants have seized government buildings in several cities, could tip the country into civil war.
- IMF cuts growth forecast -
Meanwhile the International Monetary Fund cut Tuesday its growth forecast for the global economy, pointing to the threat from the Ukraine crisis and the slowdown in major emerging economies.
The IMF said the world's two largest economies, the United States and China, continue to anchor expected growth of 3.6 percent this year and 3.9 percent in 2015.
But those figures were rolled back by 0.1 percentage points from January's forecast, when the Fund was more optimistic before Ukraine plunged into crisis with an anti-government revolt and Russia's annexation of Crimea.
However it raised the outlook for the struggling eurozone by 0.2 percentage points to 1.2 percent growth this year.
Meanwhile France's new prime minister vowed to slash labour costs by 30 billion euros and ease taxes for the worst-off in a bid to turn around the country's struggling economy.
Delivering his first policy speech to parliament since he took over as prime minister last week, Manuel Valls said the measures were aimed at boosting competitiveness and boosting the spending power of consumers.
He also vowed to make 50 billion euros in savings over three years that are necessary for France to meet its pledge to cut its deficit back under the EU threshold of 3.0 percent of GDP.
Also in Paris, shares in construction, media and telecoms group Bouygues rose by 1.34 percent to 29.39 euros on a newspaper report that the company was in talks to sell its telecom arm to low-cost upstart Free, asking 8.0 billion euros, after failing to buy SFR at the weekend.
- Euro rises -
In foreign exchange deals, the British pound was boosted after official data showed that industrial output across Britain rose by a robust 0.9 percent in February compared with activity in January, cementing the country's economic recovery.
The European single currency dropped to 82.42 British pence from 82.75 pence on Monday, while the pound climbed to $1.6742 from $1.6603.
The dollar fell to 102.09 yen from 103.09.
The euro climbed to $1.3799 from $1.3740 late on Monday in New York, getting a boost from comments by a senior ECB official downplaying the likelihood that the central bank will need to take measures to stimulate the eurozone economy in the face of ultralow inflation.
The IMF again called on the ECB to quickly act to prevent destructive deflation setting in.
Last week the central bank said it was not yet necessary to act.
IG's Baradez noted these sharply divergent views were a source of concern as there is no consensus on eurozone monetary policy.
On the London Bullion Market, the price of gold increased to $1,309.50 an ounce from $1,299 on Monday.
Asian stock markets closed mixed on Tuesday following another heavy sell-off on Wall Street, with technology stocks taking a beating, while a stronger yen added to downward pressure on Japan's Nikkei, traders said.
US stocks recovered Tuesday after three days of sharp losses, with the Dow Jones Industrial Average rising 0.17 percent to 16,273.35 points in midday trading.
The broad-based S&P 500 added 0.34 percent to 1,851.29 and the tech-rich Nasdaq Composite Index climbed 0.64 percent to 4,105.85.
Europe’s main stock markets retreated further on Tuesday as Ukraine-Russia tensions and the IMF cutting its forecast for global growth offset robust British manufacturing data.
London’s FTSE 100 dropped 0.49 percent to close 6,590.69 points, while in Paris the CAC 40 shed 0.25 percent to 4,424.83 points and the DAX 30 in Frankfurt gave up 0.21 percent to 9,490.79 points.
Investors were hesitant ahead of the start of the US corporate earnings season on Tuesday evening, said analysts.
“The poor weather has already had an impact on US indicators in the first quarter and there are concerns that this could carry over into company earnings, said analyst Alexandre Baradez at brokers IG.
Analyst Christopher Dembik of Saxo Banque in Paris agreed investors were taking a wait-and-see attitude before seeing the trend for US corporate earnings and noted “the geopolitical situation in Ukraine doesn’t encourage taking any risks.”
Russia warned Kiev on Tuesday that any use of force in Ukraine’s east, where pro-Kremlin militants have seized government buildings in several cities, could tip the country into civil war.
– IMF cuts growth forecast –
Meanwhile the International Monetary Fund cut Tuesday its growth forecast for the global economy, pointing to the threat from the Ukraine crisis and the slowdown in major emerging economies.
The IMF said the world’s two largest economies, the United States and China, continue to anchor expected growth of 3.6 percent this year and 3.9 percent in 2015.
But those figures were rolled back by 0.1 percentage points from January’s forecast, when the Fund was more optimistic before Ukraine plunged into crisis with an anti-government revolt and Russia’s annexation of Crimea.
However it raised the outlook for the struggling eurozone by 0.2 percentage points to 1.2 percent growth this year.
Meanwhile France’s new prime minister vowed to slash labour costs by 30 billion euros and ease taxes for the worst-off in a bid to turn around the country’s struggling economy.
Delivering his first policy speech to parliament since he took over as prime minister last week, Manuel Valls said the measures were aimed at boosting competitiveness and boosting the spending power of consumers.
He also vowed to make 50 billion euros in savings over three years that are necessary for France to meet its pledge to cut its deficit back under the EU threshold of 3.0 percent of GDP.
Also in Paris, shares in construction, media and telecoms group Bouygues rose by 1.34 percent to 29.39 euros on a newspaper report that the company was in talks to sell its telecom arm to low-cost upstart Free, asking 8.0 billion euros, after failing to buy SFR at the weekend.
– Euro rises –
In foreign exchange deals, the British pound was boosted after official data showed that industrial output across Britain rose by a robust 0.9 percent in February compared with activity in January, cementing the country’s economic recovery.
The European single currency dropped to 82.42 British pence from 82.75 pence on Monday, while the pound climbed to $1.6742 from $1.6603.
The dollar fell to 102.09 yen from 103.09.
The euro climbed to $1.3799 from $1.3740 late on Monday in New York, getting a boost from comments by a senior ECB official downplaying the likelihood that the central bank will need to take measures to stimulate the eurozone economy in the face of ultralow inflation.
The IMF again called on the ECB to quickly act to prevent destructive deflation setting in.
Last week the central bank said it was not yet necessary to act.
IG’s Baradez noted these sharply divergent views were a source of concern as there is no consensus on eurozone monetary policy.
On the London Bullion Market, the price of gold increased to $1,309.50 an ounce from $1,299 on Monday.
Asian stock markets closed mixed on Tuesday following another heavy sell-off on Wall Street, with technology stocks taking a beating, while a stronger yen added to downward pressure on Japan’s Nikkei, traders said.
US stocks recovered Tuesday after three days of sharp losses, with the Dow Jones Industrial Average rising 0.17 percent to 16,273.35 points in midday trading.
The broad-based S&P 500 added 0.34 percent to 1,851.29 and the tech-rich Nasdaq Composite Index climbed 0.64 percent to 4,105.85.
