LONDON - Markets drifted lower Tuesday following a sell-off on Wall Street and ahead of the next batch of U.S. corporate earnings as well as key retail sales data.
Asian and European investor sentiment
was dampened after U.S. stocks had their worst day so far this year, with major
Wall Street benchmarks dropping more than 1 percent. Whether U.S. stocks suffer
a further bout of selling could hinge on the retail sales figures as well as
earnings results from the likes of JPMorgan Chase & Co. and Wells Fargo.
"There's plenty for investors to
focus on in the lead up to the opening bell on Wall Street today," said
Craig Erlam, market analyst at Alpari.
In Europe, Germany's DAX was down 0.6
percent at 9,456 while the FTSE 100 index of leading British shares fell 0.2
percent to 6,745. France's CAC 40 dropped 0.5 percent to 4,244.
Wall Street's main indexes were poised
for a steady opening, with both Dow futures and the broader S&P 500 futures
0.1 percent higher. On Monday, the S&P closed down 1.3 percent, its biggest
fall since November.
"Worries about fourth quarter
earnings and concern about last Friday's U.S. jobs report are not helping
sentiment," said Neil MacKinnon, global macro strategist at VTB Capital.
Markets have also been perturbed by
comments from the president of the Federal Reserve's Atlanta branch that raised
the prospect of more reductions in economic stimulus despite the weak jobs
report. Dennis Lockhart said Monday he would support further cuts "over
the course of this year" if the economy continued to improve.
The Fed has said it will make an
initial $10 billion cut to its $85 billion of monthly financial asset purchases
that have supported economic recovery by keeping interest rates low.
Earlier, Asian stocks ended mostly
lower, with Japan leading declines after trading there resumed following a
holiday Monday. The Nikkei 225 dived 3.1 percent to 15,422.40. Investors got
their first chance since Friday to react to the U.S. jobs report as well as the
movement in the yen, which has risen strongly since last week.
Hong Kong's Hang Seng slipped 0.4
percent to 22,791.28 and Seoul's Kospi dropped 0.2 percent to 1,946.07. China's
benchmark Shanghai Composite Index, however, added 0.9 percent to 2,026.84.
Elsewhere, the euro was up 0.1 percent
at $1.3681 while the dollar rose 0.4 percent to 103.60 yen.