Sluggish European consumer confidence figures sent stocks falling across Asia as well, while a typhoon disrupted trading in Hong Kong, closing markets there.
During Asian trading on Tuesday, Australia’s S&P/ASX200 was down 0.05%, while Japan’s Nikkei 225 Index was down 0.24%.
Earlier, the yield on the Spanish 10-year note approached 7.50%, well above the 7% threshold deemed unsustainable by the markets on fears Spain will likely need rescue financing from its neighbors.
Eurozone policymakers recently arranged EUR100 billion in rescue funding for Spain to bolster its banking sector, though fears persist the country itself will need a financial lifeline, which sent investors worldwide rushing to safe-haven currencies like the yen, selling off stocks in the process.
Spanish Economy Minister Luis de Guindos has said that Madrid won’t need a bailout at a national level though markets remained on edge in wake of recent announcements that the country’s recession will last through 2013, a year growth was supposed to return.
Regional governments have asked for financial assistance as well, with the Murcia province joining Valencia as the latest to request financial assistance from Madrid.
Elsewhere in Europe, Moody’s Investors Service slapped negative outlooks on Germany, the Netherlands and Luxembourg, down from stable, on sentiment the three top-rated countries will eventually shoulder more debt burdens in countries like Spain and Italy.
Meanwhile fresh data broke earlier pointing to an increasingly anxious European consumer.
A European Commission index on consumer confidence dropped to -21.6 for July from -19.8 in June.
The index hit its lowest point since August 2009 and came in well below analysts’ forecasts for a -20.0 reading.
Ongoing concerns that China is facing cooler growth rates pushed down stocks as well.
In Australia, top decliners included Bathurst Resources, down 10.00%, Navitas Ltd., down 8.99%, and Aquarius Platinum, down 8.20%,
Top gainers in Australia included Billabong International, up 20.91% on talk of a takeover bid by private equity firm TPG, Energy World Corporation, up 7.50%, and OM Holdings, up 5.13%,
European stock futures indicated a mixed opening.
France’s CAC 40 futures pointed to a loss of 0.01%, while Germany’s DAX 30 futures signaled a loss of 0.37%. Meanwhile, in the U.K., the FTSE 100 futures indicated a gain of 0.09%.
Dow Jones Industrial Average futures were up 0.06% while the S&P 500 futures were up 0.03%.
Later Tuesday, the eurozone will release preliminary data on manufacturing and service-sector activity.
Germany and France will release their own individual reports.
Later Tuesday, Federal Reserve Chairman Ben Bernanke is due to speak; his comments will be closely watched for clues to the possible future direction of monetary policy.
The U.S. will also unveil preliminary data on manufacturing activity.
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