Investing.com - European stocks declined on Wednesday, as sustained concerns over the handling of the sovereign debt crisis in the euro zone continued to dampen market sentiment.
During European morning trade, the EURO STOXX 50 dropped 0.48%, France’s CAC 40 declined 0.85%, while Germany’s DAX 30 retreated 0.55%.
Market sentiment came under pressure after the German Constitutional Court delayed on Tuesday its decision on whether the euro zone's bailout fund, the European Stability Mechanism, and planned changes to the region's budget rules are compatible with German law.
Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Monday’s meeting of euro zone finance ministers also weighed on investor confidence. While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country's ailing banks but said some 30 billion euros would be available by the end of this month.
Auto stocks were broadly lower, as shares in BMW tumbled 1.80% and Daimler retreated 1.46%, while Peugeot and Renault dropped 0.94% and 1.49% respectively.
Retailer Carrefour was also on the downside, with shares plunging 1.44% after the company’s first-half sales in France fell 6.3%.
In Italy, Mediaset plunged 2.74% as the broadcaster controlled by former Prime Minister Silvio Berlusconi was cut to sell from hold at Societe Generale.
Meanwhile, financial stocks were broadly higher. Italian lender Unicredit led gains in the banking sector, with shares climbing 0.88%, while Spain’s BBVA and Banco Santander advanced 0.79% and 0.35%.
France’s Societe Generale also added 0.28%, while Germany’s biggest lender, Commerzbank, rose 0.56%.
In London, FTSE 100 dropped 0.39%, as the U.K.’s largest luxury-goods maker, Burberry’s, led losses.
Burberry Group saw shares sink 5.06% after the company posted fiscal first-quarter sales that trailed analysts’ estimates as revenue from its licensing business fell in a “challenging” period.
Financials stocks also contributed to losses, as shares in Lloyds Banking tumbled 1.68% and Barclays declined 1.20%, while HSBC Holdings and the Royal bank of Scotland fell 0.34% and 0.10%.
Also on the downside, mining giants Rio Tinto and BHP Billiton saw shares retreat 1.25% and 1.14%, while copper producers Xstrata and Kazakhmys dropped 0.28% and 0.77% respectively.
Shares in BT Group climbed 0.83% on the other hand, after Fitch Ratings affirmed the telecom company’s long-term issuer default rating at 'BBB' with a stable outlook. Rival Vodafone was up 0.46%.
In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.13% rise, S&P 500 futures signaled a 0.06% gain, while the Nasdaq 100 futures indicated a 0.01% loss.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.
During European morning trade, the EURO STOXX 50 dropped 0.48%, France’s CAC 40 declined 0.85%, while Germany’s DAX 30 retreated 0.55%.
Market sentiment came under pressure after the German Constitutional Court delayed on Tuesday its decision on whether the euro zone's bailout fund, the European Stability Mechanism, and planned changes to the region's budget rules are compatible with German law.
Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Monday’s meeting of euro zone finance ministers also weighed on investor confidence. While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country's ailing banks but said some 30 billion euros would be available by the end of this month.
Auto stocks were broadly lower, as shares in BMW tumbled 1.80% and Daimler retreated 1.46%, while Peugeot and Renault dropped 0.94% and 1.49% respectively.
Retailer Carrefour was also on the downside, with shares plunging 1.44% after the company’s first-half sales in France fell 6.3%.
In Italy, Mediaset plunged 2.74% as the broadcaster controlled by former Prime Minister Silvio Berlusconi was cut to sell from hold at Societe Generale.
Meanwhile, financial stocks were broadly higher. Italian lender Unicredit led gains in the banking sector, with shares climbing 0.88%, while Spain’s BBVA and Banco Santander advanced 0.79% and 0.35%.
France’s Societe Generale also added 0.28%, while Germany’s biggest lender, Commerzbank, rose 0.56%.
In London, FTSE 100 dropped 0.39%, as the U.K.’s largest luxury-goods maker, Burberry’s, led losses.
Burberry Group saw shares sink 5.06% after the company posted fiscal first-quarter sales that trailed analysts’ estimates as revenue from its licensing business fell in a “challenging” period.
Financials stocks also contributed to losses, as shares in Lloyds Banking tumbled 1.68% and Barclays declined 1.20%, while HSBC Holdings and the Royal bank of Scotland fell 0.34% and 0.10%.
Also on the downside, mining giants Rio Tinto and BHP Billiton saw shares retreat 1.25% and 1.14%, while copper producers Xstrata and Kazakhmys dropped 0.28% and 0.77% respectively.
Shares in BT Group climbed 0.83% on the other hand, after Fitch Ratings affirmed the telecom company’s long-term issuer default rating at 'BBB' with a stable outlook. Rival Vodafone was up 0.46%.
In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.13% rise, S&P 500 futures signaled a 0.06% gain, while the Nasdaq 100 futures indicated a 0.01% loss.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.