European stocks mixed to lower, talk of ECB rate cut; Dax down 0.39%

Investing.com - European stocks were mixed to lower on Monday, as concerns over the worsening of the debt crisis in the euro zone fueled speculation that the European Central Bank may cut interest rates at its monthly policy meeting this week.

During European afternoon trade, the EURO STOXX 50 dipped 0.03%, France’s CAC 40 added 0.21%, while Germany’s DAX 30 retreated 0.39%.

Markets were jittery after Sentix said its investor confidence index for the euro zone dropped to minus 10.6 in March from a reading of minus 3.9 the previous month, exceeding expectations for a decline to minus 5.2.

The report came after preliminary data on Friday showed that consumer price inflation in the bloc ticked down to a annualized rate of 1.8% in February, while a separate report showed that the unemployment rate in the region rose to a new record high of 11.9% in January.

Meanwhile, investors were also cautious after USD85 billion of automatic spending cuts, known as the "sequestration", began on Friday as lawmakers could not agree on spending cuts and tax reform to tackle the country's budget deficit.

U.S President Barack Obama said on Sunday he could compromise with Republican lawmakers by cutting welfare entitlements such as Medicare.

Financial stocks were mixed. In France, Societe Generale climbed 0.87% and BNP Paribas edged down 0.19%, while in Germany, Deutsche Bank tumbled 1.22% and Commerzbank eased up 0.07%.

Peripheral lenders were also mixed, as Spanish banks BBVA and Banco Santander and BBVA added 0.25% and 1.07%, while Italy's Unicredit and Intesa Sanpaolo plunged 1.52% and 2.50%.

Meanwhile, Spanish oil and gas firm Repsol jumped 2.37%, extending earlier gains, after selling its treasury shares, totaling 5% of the company's stock, to Singapore's Temasek for EUR1.04 billion.

In London, commodity-heavy FTSE 100 declined 0.43%, weighed by sharp losses in mining stocks, while Markit research group said the U.K.'s construction purchasing managers' index dropped to 46.8 in February, the lowest level since November 2009.

Mining giants BHP Billiton and Rio Tinto remained lower, plummeting 1.68% and 3.20% respectively, while rival company Eurasian Natural Resources plunged 2.06%.

Copper producers Xstrata and Kazakhmys added to losses, with shares diving 2.35% and 4.35%.

Elsewhere, U.K. lenders continued to trend sharply ower. Shares in Barclays tumbled 1.22% and HSBC Holdings plunged 2.07%, while the Royal Bank of Scotland retreated 2.01% and Lloyds Banking sank 3.55%.

Department store Debenhams extending earlier losses, diving 10.84%, after saying that profit will drop in the first half of the year.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.19% drop, S&P 500 futures signaled a 0.17% decline, while the Nasdaq 100 futures indicated a 0.27% loss.

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Also Monday, official data showed that the number of unemployed people in Spain rose far less-than-expected in February, increasing by 59,400 after a 132,100 rise the previous month.

Analysts had expected the number of unemployed people to rise by 77,500 last month.