European stocks mixed to lower after Moody’s warning; DAX down 0.23%

Investing.com - European stocks were mixed to lower on Tuesday, as sentiment weakened after Moody’s rating agency downgraded its outlook for the European Union’s credit rating, while investors awaited the outcome of the European Central Bank’s policy meeting later in the week.

During European morning trade, the EURO STOXX 50 inched up 0.01%, France’s CAC 40 edged down 0.21%, while Germany’s DAX 30 fell 0.23%.

Earlier in the day, Moody’s put the EU’s AAA credit rating on negative outlook, saying that its decision is in line with projections for the main budget contributors to the EU.

Germany, the Netherlands, France and the U.K. are all already on negative outlook.

Sentiment remained mildly supported however, after ECB President Mario Draghi indicated on Monday that he would be comfortable buying bonds with maturities of up to about three years, saying that it would not constitute state financing.

At its policy meeting on Thursday, the ECB is expected to announce the details of a long awaited debt-buying program designed to help ease funding pressures for indebted euro zone countries.

Financial stocks were mixed as shares in French lenders BNP Paribas and Societe Generale climbed 0.98% and 0.43% respectively, while Germany’s Deutsche Bank and Commerzbank declined 0.21% and 0.48% respectively.

Italian lenders were sharply higher on the other hand, with shares in Unicredit and Intesa Sanpaolo surging 1.87% and 1.51%.

Shares in German airline company Lufthansa added to losses, dropping 0.58%, as flight attendants began strikes at two major German hubs early in the day. The Independent Flight Attendants Organization (UFO) trade union announced further action for the afternoon.

Elsewhere, auto makers were broadly lower, led by German group Volkswagen, down 1.42%, and closely followed by BMW, whose shares plunged 1.35%, while France’s Peugeot and Renault lost 0.84% and 0.50% respectively.

In London, FTSE 100 dropped 0.45%, ahead of the release of highly anticipated U.K. construction activity data later in the session.

U.K. lenders were broadly lower, as shares in the Royal Bank of Scotland tumbled 1.39% and HSBC Holdings slumped 0.47%, while Lloyds Banking and Barclays retreated 0.24% and 0.19%.

Also on the downside, U.K. mobile phone giant Vodafone saw shares plummet 1.39%, amid reports it signed an agreement with Kuwaiti telecom company Zain to expand its presence in the Middle East.

The company said in a statement that the deal will complement its own regional operations in Egypt and Qatar, and increase the number of countries in which it has partner market agreements to more than 50.

Meanwhile, mining and oil stocks were mixed. Shares in Rio Tinto added 0.18% and BHP Billiton eased 0.03%, while Petrofac shares jumped 1.06%.

In the U.S., equity markets pointed to a moderately higher open. The Dow Jones Industrial Average futures pointed to a 0.23% increase, S&P 500 futures signaled a 0.21% rise, while the Nasdaq 100 futures indicated a 0.35% gain.

Also Tuesday, government data showed that the number of unemployed people in Spain rose by 38,200 in August, following a 27,800 decline the previous month.

Later in the day, the Institute for Supply Management was to release a report on U.S. manufacturing activity.