Forex Pros - European stock markets erased early gains on Wednesday, as shares in the financial sector performed poorly after Moody's downgraded Portugal's bond ratings, while U.S. futures indexes pointed to a lower open on Wall Street.
During European morning trade, the EURO STOXX 50 slumped 1.05%, France's CAC 40 dropped 1.25%, while Germany's DAX was down 0.5%.
Earlier in the day, ratings agency Moody's downgraded Portugal's long-term government bond ratings to A3, citing a weaker outlook for economic growth, risks to the government's deficit-reduction plans and a possible need to recapitalize banks.
Spain's largest lender Banco Santander tumbled 2.4%, rival BBVA saw shares drop 2.7%, while Europe's largest banking group BNP Paribas saw shares plunge 3.2%.
Meanwhile, markets continued to monitor the situation in Japan, as authorities battled to contain the fallout from the damaged Fukushima Daiichi nuclear plant. Earlier, staff returned to work at the plant, after a rise in radiation levels following a fire forced them to temporarily abandon the facility.
Shares in Germany's second largest renewable energy provider E.ON jumped 1.85% after the stock lost nearly 10% since Monday, while rival RWE AG added 0.85%.
In London, the FTSE 100 slumped 0.8% after a government report showed that the U.K. unemployment rate unexpectedly rose to 8.0% in January, from 7.9% in the preceding month.
Meanwhile, shares in HSBC Holdings dropped 2.8%, Barclays saw shares slump 2.2%, while insurance provider Standard Life saw shares tumble 3.9% after the stock was downgraded to 'underperform'.
The outlook for U.S. equity markets, meanwhile, was downbeat. The Dow Jones Industrial Average futures pointed to a drop of 0.22%, S&P 500 futures indicated a loss of 0.26%, while the Nasdaq 100 futures pointed to a decline of 0.11%.
Later in the U.S. was to publish a flurry of data, with reports on building permits as well as data on producer price inflation, housing starts and crude oil stockpiles.