European stocks push lower on E.C. forecast; Dax down 0.52%

European stocks pushed broadly lower on Tuesday, after the European Commission cut its forecast for euro zone growth, amid ongoing speculation over a possible rate cut by the European Central Bank.

During European afternoon trade, the EURO STOXX 50 dropped 0.87%, France’s CAC 40 retreated 0.80%, while Germany’s DAX 30 declined 0.52%. 

The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.

The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015. 

European equities had strengthened on Monday after data showed that manufacturing activity in the euro zone edged higher in October from the previous month.

But investors remained cautious ahead of Thursday’s meeting after weak euro zone inflation data last week fuelled speculation that the ECB will cut rates in order to safeguard the economic recovery in the region. 

Financial stocks remained broadly lower, as French lenders BNP Paribas and Societe Generale tumbled 1.24% and 2.06%, while Germany's Deutsche Bank plummeted 1.97%. 

Among peripheral lenders, Spanish banks BBVA and Banco Santander declined 1.40% and 1.52% respectively, while Italy's Unicredit and Intesa Sanpaolo lost 0.94% and 1.12%. 

Elsewhere, BMW plunged 3.71% after the automaker said third-quarter earnings fell to EUR1.93 billion from EUR2 billion a year earlier, still exceeding analysts estimates. 

In company news, Swiss drugmaker Novartis climbed 0.50% as the company reportedly identified its animal-health business as a top candidate for a sale. 

In London, commodity-heavy FTSE 100 slid 0.59%, as U.K. lenders tracked their European counterparts lower, although data showed that activity in U.K. services sector expanded at the fastest rate in 16 years in October, bolstering the outlook for the economic recovery. 

HSBC Holdings tumbled 1.41% and Barclays plunged 2.95%, while Lloyds Banking and the Royal Bank of Scotland retreated 2.04% and 2.55%. 

Shares in mining giants BHP Billiton and Rio Tinto jumped 1.72% and 2.33% respectively, while Glencore Xstrata and Antofagasta surged 1.95% and 2.32%. 

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.24% fall, S&P 500 futures signaled a 0.22% loss, while the Nasdaq 100 futures indicated a 0.26% decline. 

Also Tuesday, Spain’s Employment Ministry said the number of unemployed people increased by a seasonally adjusted 87,000 in October, compared to expectations for a rise of 31,300. 

The number of unemployed people increased 25,600 in September. 
Later in the day, the Institute of Supply Management is to release a report on service sector activity.