The European markets closed lower on Monday as investors remained cautious ahead of Tuesday’s U.S. presidential election. Investors across the globe are nervous as to how the U.S. will contend with an automatic $600 billion in spending cuts and tax hikes at the end of the year — known as the fiscal cliff — after the election.
European markets are set for a mixed open on Wednesday after the Catalonian region in Spain asked for a financial lifeline from the national government, raising concerns that the country itself will soon ask for a bailout.
European markets are called to open in negative territory on Tuesday as the debate continues over how far the European Central Bank (ECB) can, or will, go to save the euro zone.
European stocks are expected to open lower on Wednesday amid concerns over Spain and Greece’s finances and following a rare earnings miss by Apple. With Spain’s borrowing costs soaring after an auction of short term debt on Tuesday an alarm signal was sounded when the cost of borrowing over 5 years rose above the cost of 10 year borrowing.
The open of the European market is expected to be mixed by spread betting firms following Monday’s highly volatile start to the trading week. Fears over Spain’s finances had seen its borrowing costs soar past 7.5 percent and its stock market trading lower by as much as 5.5 percent before rallying to close just 1 percent lower.
European shares were called lower on Friday tracking Asian markets overnight after corporate earnings in the U.S. proved a mixed bag and investors waited for euro zone finance ministers to approve an agreement to lend up to 100 billion euros ($122.5 billion) to Spain so it can recapitalize its banks.
European markets were looking at a higher open on Tuesday, tracking shares in Asia higher as investors grew hopeful that Federal Reserve chairman Ben Bernanke could signal additional quantitative easing and as Spain tests investors' appetite for its debt for the first time since it announced further austerity measures.
European markets were looking at a mixed open on Monday, with investors searching for direction after Chinese premier Wen Jiabao warned at the weekend that China's economic woes will continue for some time but that the country's fundamentals remain favorable, and with the Tokyo market closed due to a public holiday.