Investing.com - European stocks declined in Tuesday, after the release of disappointing inflation data from Spain and amid growing concerns over political tensions in Greece.
Trading volumes were expected to remain light ahead of the New Year's holiday.
During European morning trade, the EURO STOXX 50 lost 1.01%, France’s CAC 40 declined 0.86%, while Germany’s DAX 30 dropped 0.72%.
Preliminary data earlier showed that Spanish consumer price inflation dropped 1.1% this month, compared to expectations for a 0.7% fall, after a 0.4% downtick in November.
Markets were jittery after Greek Prime Minister Antonis Samaras said on Monday that he will recommend parliamentary elections are held on January 25, almost 18 months before his coalition's term was due to end.
The announcement came as Samaras failed in his third attempt to persuade lawmakers to back his candidate for head of state, forcing the legislature’s dissolution.
Financial stocks were broadly lower, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) dropped 1.27% and 0.72%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) retreated 0.66% and 0.32%.
Among peripheral lenders, Italy's Unicredit slipped 0.12%, while Spanish banks Banco Santander and BBVA tumbled 1.02% and 1.13% respectively.
In London, commodity-heavy FTSE 100 retreated 0.63%, weighed by sharp losses in the energy sector.
Shares in oil and gas major BP (LONDON:BP) retreated 0.81% and Royal Dutch Shell (LONDON:RDSa) lost 1.28%, while rival Tullow Oil (LONDON:TLW) plummeted 2.42%.
Financial stocks added to losses, as Lloyds Banking (LONDON:LLOY) slipped 0.21% and Barclays declined 0.43%, while the Royal Bank of Scotland (LONDON:RBS) slid 0.56% and HSBC Holdings (LONDON:HSBA) tumbled 1.04%.
Next (LONDON:NXT) led gains on the index, with shares surging 4.18% after the retailer said that sales for the fourth quarter to date exceeded analysts' estimates.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.17% fall, S&P 500 futures signaled a 0.24% decline, while the Nasdaq 100 futures indicated a 0.15% loss.