European stocks decline on U.S. recovery fears; DAX sheds 0.6%

Forexpros - European stock markets were broadly lower on Tuesday, falling to a nine-month low amid concerns the U.S. economic recovery was faltering, while BNP Paribas shares dropped following disappointing earnings.

During European morning trade, the EURO STOXX 50 fell 0.5%, France's CAC 40 shed 0.45%, while Germany's DAX 30 retreated 0.6%.

A report on Monday showed that the U.S. Institute for Supply Management's Manufacturing Index grew at its slowest pace in two years in July.

Investors also remained wary amid concerns that a deal to raise the U.S. debt ceiling would not be sufficient to prevent ratings agencies from downgrading the U.S. sovereign debt rating.

Meanwhile, Europe's largest retail lender BNP Paribas saw shares fall 2.1% after it said second quarter revenue declined 1.7% to EUR10.98 billion. The bank said it took a EUR534 million provision for the Greece assistance program.

Italian lenders were also down after Italian bond yields jumped amid ongoing fears over sovereign debt contagion n the euro zone. Unicredit shares sank 1.85%, while Intesa Sanpaolo saw shares drop 2.1%.

On the upside BMW saw shares climb 1.4% after it reported second quarter profit more than doubled to EUR1.81 billion. The upbeat results prompted the automaker to lift its earnings outlook for the rest of the year.

In London, the FTSE 100 declined 0.4% as commodity-linked shares led losses amid concerns the uncertain global economic outlook would weigh on demand for raw materials.

Mining giants Rio Tinto and BHP Billiton fell 2.2% and 1.5% respectively, while oil giant British Petroleum saw shares drop 1.75%.

Barclays saw shares climb 1.1% after it reported a 24% increase in first half pretax profit. However, net profit in the period dropped 38%, as a previously announced GBP1 billion provision to cover bad loans weighed.

Meanwhile, the outlook for U.S. equity markets was downbeat ahead of earnings reports from media giant CBS, fashion apparel retailer Coach and pharmaceutical company Pfizer.

The Dow Jones Industrial Average futures pointed to a loss of 0.35%, the S&P 500 futures declined 0.45%, while the Nasdaq 100 futures edged down 0.4%.

Later in the day, the U.S. was to publish official data on personal consumption expenditures and personal spending.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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