European stocks were down for a second day, dropping to their lowest in four months amid fears that hard-won austerity plans have fallen apart.
Greece is facing a political impasse after voters turned down the parties that accepted the international bailout terms in the Sunday elections. Alexis Tsipras, the leader of Greece's left-wing Syriza bloc, said on Tuesday the vote had "clearly nullified" the EU/IMF loan agreement.
Meanwhile, French Foreign Minister Alain Juppe warned against renegotiating the fiscal compact and said such a move could unleash market turbulence. The current situation in Greece is extremely "difficult and tense," reports said citing his interview to Europe 1 radio.
Spanish banks were pummeled after borrowing costs spiked higher for Madrid.
The Euro Stoxx 50 index of eurozone bluechip stocks lost 0.47 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, was down 0.37 percent.
The German DAX crept up 0.47 percent but the French CAC lost 0.20 percent. The UK's FTSE 100 shed 0.44 percent and Switzerland's SMI lost 0.70 percent.
German lender Commerzbank said it has already surpassed the original capital target of 5.3 billion euros set by the European Banking Authority by about 1.1 billion euros as of March 31. The stock was up 1.6 percent.
E.ON reported a decline in first-quarter profit, citing lower prices in Europe power generation markets and shutdown of nuclear power stations in Germany. Despite this, the company confirmed its 2012 and 2013 forecasts. The shares fell 1.4 percent.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.