European stocks lower as markets eye German auction; DAX down 0.57%

Investing.com - European stock markets were lower on Wednesday, as market sentiment weakened ahead of a German government bond auction amid sustained concerns over the euro zone’s financial woes.

During European morning trade, the EURO STOXX 50 plummeted 1.11%, France’s CAC 40 retreated 0.66%, while Germany’s DAX 30 fell 0.57%.

Markets were jittery as Germany was preparing to sell EUR5 billion of 10-year government bonds later in the day.

Investors were also focusing on a key meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on January 9 to advance discussions on tighter fiscal integration in the European Union.

Financial stocks led losses as shares in Germany’s Deutsche Bank tumbled 2.11%, while French lenders BNP Paribas and Societe Generale plunged 1.30% and 2.22% respectively.

Peripheral lenders also contributed to losses with Italian Unicredit sinking 9.79% and Intesa Sanpaolo dropping 4.05%, while Spain’s BBVA and Banco Santander retreated 3.15% and 4.18%.

Meanwhile, Audika Groupe declined 2.43% after lowering its 2011 sales forecast, saying the “very unfavorable” economic outlook led some clients to wait before buying its hearing aids.

Vestas Wind Systems was also on the downside, with shares plunging 17.96% as the world’s biggest wind-turbine maker cut its sales forecast.

In London, FTSE 100 was up 0.01%, as U.K. lenders tracked their European counterparts lower.

Shares in Barclays declined 1.11% and HSBC Holdings dropped 0.97%, while the Royal Bank of Scotland and Lloyds Banking slid 0.76% and 0.19% respectively.

Elsewhere, the U.K.’s second-largest clothing retailer Next saw shares dive 4.28% after it reported worse-than-expected sales as growth in online revenue failed to offset lower store sales during a period that included the peak Christmas holiday season.

On the upside, energy stocks were among the top gainers with British Petroleum climbing 1.33% and mining giant Rio Tinto advancing 0.65%, while Bhp Billiton rose 0.29%.

In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a fall of 0.16%, S&P 500 futures signaled a 0.07% decline, while the Nasdaq 100 futures indicated a 0.10% gain.

Later in the day, the euro zone was to publish a preliminary report on consumer price inflation. In the U.S., data was to be released on factory orders.