European stocks are expected to open lower on Tuesday 

European-Stocks
  • Europe poised for weaker open as rally loses steam

European stocks are expected to open lower on Tuesday as market turn mixed in Asia and European markets lose momentum.

The London FTSE index is expected to open 10 points lower at 6,672, the German DAX down 10 points at 9,823 and the French CAC unchanged at 4,264, according to IG.

In Asia, markets were mixed on Tuesday, as Japan shares surged as investors digested stimulus comments made by Japanese Prime Minister Shinzo Abe late on Monday, helping to weaken the yen.

After his ruling coalition government did well in parliamentary elections at the weekend, Abe said that he planned to make “bold investment into seeds of future growth,” Reuters reported.

He did not set out the size of any fiscal stimulus spending, but analysts expected a “big bazooka” might be in the works. The market was also expecting the Bank of Japan would soon step up with further monetary stimulus.

In other news, the European Commission revised down its estimates for growth in the euro zone and in Britain after the U.K.’s vote to leave the European Union (EU), in early estimates reported by the economic affairs commissioner Pierre Moscovici on Monday.

“We expect the increased uncertainty to reduce U.K. GDP by 1 to 2.5 percentage points by 2017 compared to the baseline scenario of remaining (in the EU). In the 27 EU member states and in the euro area the impact could be between 0.2 and 0.5 percentage points,” he said, according to a statement from the European Commission.

Meanwhile, at a meeting of the Eurogroup of euro zone finance ministers on Monday, Italy was warned to play by the rules when it comes to bank bailouts. Italy wants to use public finances to recapitalize its ailing banks but that would break European banking rules that require creditors to take losses too. Eurogroup head Jeroen Dijsselbloem said on Monday that restrictions are clear when it comes to bank bailouts.

There are no major earnings or data releases Tuesday.

Source: CNBC – Europe poised for weaker open as rally loses steam

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