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Italy stocks close 2.6% lower on political turmoil as European markets slump

  • Investors are fearful of the looming prospect of fresh elections in Italy this year.
  • Spanish Prime Minister Mariano Rajoy is due to face a confidence vote over his leadership on Friday.
  • Dixons Carphone tumbled to the bottom of the European benchmark after it issued a profit warning.

European stocks closed lower Tuesday amid renewed fears of a euro zone break-up risk in Italy and political turmoil in Spain.

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC
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IBEX 35
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The pan-European Stoxx 600 closed 1.37 percent lower provisionally, with all major bourses and every sector apart from oil in negative territory.

Among national indexes, Italy's FTSE MIB fell 2.65 percent, amid renewed political pain. The euro zone's third-largest economy has been without a government since an inconclusive vote in early March, with anti-establishment political groups abandoning their efforts to form a coalition over the weekend amid a dispute with the country's head of state.

Meanwhile, Spain's IBEX 35 was also off by almost 2.5 percent following news the country's Prime Minister, Mariano Rajoy, is due to face a confidence vote over his leadership on Friday. The announcement compounded political volatility in southern Europe.

Europe's banking index led the losses Tuesday, off almost 3.2 percent, on pace for its worst day since August 2, 2016. Spanish lenders Banco Santander and Caixabank and Italian lender Unicredit were among the worst performers in the sector.

Looking at individual stocks, Dixons Carphone tumbled to the bottom of the European benchmark after it issued a profit warning. The British retailer said profit would fall by 21 percent in the current year, with 92 standalone stores also set to close. Its shares were more than 20.7 percent lower on the news.

Oil prices mixed

On Wall Street, stocks traded lower on fears that instability could return to the euro zone. The single currency was seen trading at $1.1555, down 0.58 percent.

On the data front, Italian consumer confidence fell in May to 113.7 points, down from 116.9 the previous month, while French consumer confidence stood at 100 points, unchanged from the April level.

Elsewhere, oil prices fell Tuesday, amid rising expectations that major producers could soon reverse some of their ongoing production cuts. Brent crude traded at around $74.94, down almost half a percent while U.S. WTI stood at $66.34, down more than 2 percent.

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