European stocks lower on E.Z. concerns; DAX tumbles 1.16%

Investing.com - European stock markets were sharply lower on Tuesday, as sustained concerns over the effects of the euro zone’s debt crisis on the region’s growth outlook continued to weigh on sentiment.

During European morning trade, the EURO STOXX 50 dropped 1.12%, France’s CAC 40 declined 0.90%, while Germany’s DAX 30 tumbled 1.16%.

Sentiment was hit after China lowered its growth target and data pointed to the euro zone possibly slipping back into recession.

Data showed on Monday that the euro zone's services sector contracted at a faster rate than initially estimated in February, shrinking for the fifth time in six months, while investor confidence improved less-than-expected this month, remaining in negative territory for the eighth consecutive month.

Meanwhile, markets were also jittery ahead of the March 8 deadline for Greek bondholders to join the agreement under which they will exchange their existing Greek government bonds for new paper in a swap deal.

Financial stocks led losses as shares in French lenders Societe Generale and BNP Paribas tumbled 1.96% and 1.20%, while Germany’s Deutsche Bank and Commerzbank plunged 1.52% and 3.90% respectively.

Auto makers were also broadly lower, led by a 4.47% drop in Peugeot shares after Europe’s second-biggest carmaker said it is seeking to raise about EUR1 billion in a rights offer and proceeds will be used for projects with General Motors.

German electric power company RWE also added to losses, sliding 1.40% as recurrent net income fell to EUR2.48 billion from EUR3.75 billion a year earlier.

In London, FTSE 100 retreated 0.55%, after industry data showed that house prices in the U.K. fell unexpectedly in February.

U.K. lenders tracked their European counterparts sharply lower. Shares in Lloyds Banking tumbled 1.49% and the Royal Bank of Scotland declined 1.17%, while HSBC Holdings and Barclays retreated 1.02% and 1.06% respectively.

Elsewhere, mining giants Rio Tinto and Bhp Billiton were also on the downside, with shares dropping 0.94% and 0.65%, while copper producers Xstrata and Kazakhmys declined 0.81% and 2.29%.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a fall of 0.52%, S&P 500 futures signaled a 0.57% decline, while the Nasdaq 100 futures indicated a 0.50% loss.

Also Tuesday, Portuguese Prime Minister Pedro Passos Coelho said he won’t mimic Spain and seek to ease Portugal’s deficit targets to withstand a deepening recession.