European markets closed lower on Tuesday as investors reacted to U.K. Prime Minister Theresa May's surprise announcement to call a snap general election on June 8.
The pan-European Stoxx 600 ended 1.1 percent lower with all sectors and major bourses trading in negative territory.
May, outlining her decision to hold a general election in less than eight weeks, described her "reluctance" in doing so and blamed divisions in Westminster as a key reason for her sudden reversal of position. A Commons vote will take place on Wednesday in order to see whether Parliament will back a general election being held before 2020.
Sterling rebounded sharply against the dollar on Tuesday after Britain's Prime Minister said she wanted to hold a general election. Having fallen in early trading, the U.K. currency surged more than 1.5 percent to hit $1.2758, its highest level since mid-December.
Basic resources led the losses and contracted over 3.1 percent as steel and iron ore prices dropped. Pandora was down by around 12 percent after a Carnegie survey showed the Danish jewelry maker may have struggled to create revenue growth in the firms last quarter.
Galapagos had been trading at the top of the European benchmark after the firm announced it had raised $338 million in a U.S. public offering, Reuters reported. However, its shares fell sharply to close more than 2.1 percent lower.
In other corporate news, Casino Group, slipped 3.4 percent after reporting a slowdown in sales growth. Elsewhere, Post Holdings is set to buy Britain's Weetabix for $1.76 billion, Reuters reported.
Meanwhile, in the U.S., the Dow Jones industrial average and broader S&P 500 both continued lower as stocks slipped after the U.K. government called for early elections.
Goldman Sachs' earnings miss drags on US banks
Goldman Sachs earnings disappointed on Tuesday as a bottom line miss knocked shares down by over 3 percent and weighed on other U.S. heavyweights.
Also on Tuesday, hopes over immediate tax reforms in the U.S. have somewhat dissipated after Treasury Secretary Steve Mnuchin told the Financial Times that a new plan is unlikely to be ready before August.
U.S. Vice President Mike Pence will meet Japanese Deputy Prime Minister Taro Aso on Tuesday, aiming to open Japan's doors for U.S.-made goods and attracting Japanese infrastructure investment. Earlier, Japan's Prime Minister Shinzo Abe said he supported the U.S. administration stating that pressure is necessary for dealing with North Korea's missile and nuclear threat.
The International Monetary Fund raised its global growth forecast on Tuesday citing manufacturing and trade gains in Europe,