European stocks mixed on debt worries; DAX up 0.26%

Investing.com - European stock markets were mixed on Tuesday, as markets were jittery ahead of Italian bond auctions later in the week amid sustained concerns over the euro zone’s financial crisis.

During European afternoon trade, the EURO STOXX 50 eased 0.02%, France’s CAC 40 added 0.14%, while Germany’s DAX 30 gained 0.26%.

With markets in London remaining closed for an extended holiday break and most investors already away on year-end leave, trading volumes were low, resulting in subdued trade.

Sentiment weakened as the yield on Italian ten-year bonds rose above the 7% threshold, a level widely considered to be unsustainable, adding to concerns over the handling of the country’s financial troubles.

Meanwhile, Spain’s new government announced negative economic growth in the final quarter of 2011 and the first quarter of the new year, technically putting the country back into recession.

Investors were also cautious after data showed earlier  that the use of the European Central Bank's overnight deposit facility reached a new, all-time high Monday, as euro zone banks increasingly turned to the ECB as a safe-haven for extra funds.

The report added to speculation that the central bank’s three-year loan operation last week did little to strengthen the region’s banking sector.

Financial stocks remained mixed as shares in French lender BNP Paribas were up 0.60%, while Societe Generale tumbled 1.50%, extending earlier losses, and Germany’s Deutsche bank retreated 0.39%.

Meanwhile, Banco Comercial Portugues and Banco Espirito Santo rallied 5.98% and 5.80% respectively on reports Portugal may recapitalize its banks without becoming a shareholder. The government could subscribe contingent convertible bonds sold by the banks, according to local newspaper Jornal de Negocios.

Chemical shares were among the best performers of the day, led by Wacker Chemie and Symrise whose shares climbed 1.63% and 1.31%.

On the downside, Sky Deutschland plummeted 3.04% on news the company won’t show Paramount Pictures Corp.’s movies in 2012. According to Financial Times Deutschland, the change will dampen enthusiasm for the movie channel.

In the U.S., equity markets pointed to a mixed to lower open. The Dow Jones Industrial Average futures pointed to a fall of 0.13%, S&P 500 futures signaled a 0.15% loss, while the Nasdaq 100 futures indicated a 0.02% gain.

Later in the day, the U.S. was to publish industry data on house price inflation, as well as a report on consumer confidence and manufacturing activity in Richmond.