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(Sharecast News) - European stock markets opened slightly lower on Tuesday as ongoing political uncertainty in France continued to weigh on risk appetite.
The Stoxx 600, which traded within a narrow range on Monday to retreat from Friday's record close of 570.24, was trading down another 0.2% at 569.28 early on. Last week's fresh peak followed a near-4% surge for the index over just six trading sessions.
Ongoing losses on the CAC 40 in Paris were weighing on the pan-European benchmark, with indices in Frankfurt, Milan and Zurich also in the red. London's FTSE 100 was bucking the trend to edge 0.1% higher.
French stocks dropped sharply on Monday after France's newly appointed prime minister abruptly resigned just hours after he had named cabinet. The new administration was due to meet for the first time on Monday afternoon. However, allies across the political divide were disappointed with the line-up, and threatened to withdraw their support, prompting Lecornu's shock departure.
In the latest developments, Lecornu is reportedly starting last-ditch talks with various parties to attempt to bring an end to the political turmoil engulfing the country.
"The problem is the parliamentary arithmetic doesn't stack up and no government wants to fall on its sword to get the kind of reforms required to sort out the budget deficit. So, we end in a circular mess of failed governments and resigning prime ministers," said Stephen Innes, managing partner at SPI Asset Management.
In economic data, German factory orders unexpectedly fell for the fourth straight month in August, dropping 0.8% after a revised 2.7% decrease in July. The consensus forecast was for an increase of 1.4%
Meanwhile, the Halifax UK house price index fell 0.3% in September following a 0.2% uplift in August, marking its first decline since May. Most analysts had been expecting another 0.2% rise.
In equity news, London-listed discount retailer B&M was a heavy faller early on, dropping 12% after guiding to a big fall in annual profits this year. The company said it was launching a turnaround plan after underlying sales in its main UK operation barely grew in the first half.
Pharma stocks were also providing a drag on markets on Tuesday, with Bayer, Novo Nordisk, Sanofi and GSK trading lower. British outfit AstraZeneca, however, was flat after reporting positive results from a phase III clinical trial of its Baxdrostat treatment.
