European stocks lower as debt concerns persist; DAX down 0.84%

Investing.com - European stock markets were lower on Tuesday, as concerns over the debt crisis in the euro zone persisted after weekend elections in Greece and France sparked fears that recent austerity plans will be abandoned.

During European morning trade, the EURO STOXX 50 dropped 0.86% and Germany’s DAX 30 fell 0.84%, while markets in France remained closed for a national holiday.

Investors remained cautious after weekend election results in Greece and France raised doubts over Europe’s ability implement austerity measures deemed necessary to tackle the debt crisis in the region.

Initial attempts to form a government in Greece failed on Monday, fanning fears that the country may not have a government in place in time to secure its next tranche of international aid next month.

Market participants were also watching developments in France, where Socialist Francois Hollande is to be inaugurated on May 15. Hollande has said he wants to renegotiate the euro zone fiscal pact in order to stimulate growth in the region.

Financial stocks led losses, as shares in French lenders BNP Paribas and Societe Generale tumbled 1.92% and 1.56% respectively, while Germany’s Deutsche Bank and Commerzbank lost 0.19% and 1.14%.

Spanish banks resisted, however, with BBVA and Banco Santander adding 0.61% and 0.66% respectively, after Rodrigo Rato stepped down on Monday as chairman of ailing Spanish lender Bankia, helping to clear the way for a rescue plan involving the use of public funds to help troubled Spanish banks.

The government hopes this will persuade international investors of Spain's financial stability.

Meanwhile, Dutch telecommunications company KPN declined 0.30%  after America Movil offered 8 euros a share which would more than quintuple its stake in the Netherlands’ largest phone company to 28%.

In London, FTSE 100 fell 0.24%, after data showed that house prices in the U.K. declined more-than-expected April.

U.K. lenders tracked their European counterparts lower, as shares in Barclays plunged 3.14% and HSBC Holdings tumbled 1.23%, while the Royal Bank of Scotland and Lloyds Banking fell 0.25% and 0.18%.

On the upside, Tullow Oil saw shares surge 3.98% after announcing that the Ngamia-1 exploration well onshore Kenya in Block 10BB reached an intermediate depth of 1,515 meters and the total net oil pay encountered so far has increased it more than 100 meters across multiple reservoir zones.

Aviva, the U.K.’s second-biggest insurer, also added to gains as shares climbed 1.54% after Andrew Moss stepped down as chief executive officer following investor protests over executive compensation.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to fall of 0.39%, S&P 500 futures signaled a 0.39% decline, while the Nasdaq 100 futures indicated a 0.44% loss.

Later in the day, Germany was to release official data on industrial production, while European Central Bank President Mario Draghi was due to speak in Frankfurt.