European stocks turn broadly lower; Dax down 0.02%

Investing.com - European stocks were turned broadly lower on Monday, as concerns over U.S. budget talks overshadowed recent signs of progress in handling the sovereign debt crisis in the euro zone.

During European afternoon trade, the EURO STOXX 50 fell 0.32%, France’s CAC 40 dropped 0.36%, while Germany’s DAX 30 dipped 0.02%.

Sentiment strengthened last week, amid signs of headway in dealing with the debt crisis in the region after finance ministers agreed a deal on rules for supervising banks.

Ministers also released EUR49.1 billion of financial aid for Greece, after the country completed a scheme to buy back its debt from private investors last week.

Meanwhile, investor focus shifted back to negotiations to avoid the U.S. fiscal cliff following the central bank announcement, amid concerns that the automatic tax hikes and spending cuts due to take effect on January 1st could derail the U.S. recovery.

Financial stocks turned broadly lower, as shares in French lenders BNP Paribas and Societe Generale dropped 0.77% and 0.41%, while Germany's Deutsche Bank declined 0.58%.

Meanwhile, KPN remained sharply lower, diving 13.50% as the Dutch phone company cut its dividend after spending EUR1.35 billion to buy frequencies for faster mobile networks.

On the upside, French carmaker Peugeot added to gains, with shares surging 3.63%, after saying it is close to finalizing a deal with a group of banks to refinance debt at its banking unit.

In London, FTSE 100 dropped 0.44%, weighed by losses in financial stocks.

Shares in Barclays slumped 0.47% and HSBC Holdings dropped 0.55%, while the Royal Bank of Scotland retreated 0.83%. Lloyds Banking overperformed on the other hand, inching up 0.06%.

Aggreko remained one of the session's top losers, plunging 16.99% after saying a decline in military revenues in Afghanistan and uncertainty about a number of Japanese contracts signalled a lower performance in 2013 than in 2012.

Vodafone was also on the downside, with shares tumbling 2.47%, amidworries over the cost of mobile networks after Holland raised much more than expected in an auction of fourth generation wireless frequencies.

Elsewhere, mining giants Rio Tinto and BHP Billiton advanced 0.63% and 0.80%, while copper producer Kazakhmys jumped 1.45%.

In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.17% rise, S&P 500 futures signaled a 0.24% increase, while the Nasdaq 100 futures indicated a 0.10% loss.

Later in the day, the U.S. was to publish official data on manufacturing activity in New York State, as well as a report on the balance of domestic and foreign investment in U.S. securities.