LONDON ( The Deal) -- European and Asian markets fell Wednesday, as a buildup of Russian forces near the Ukraine border sparked fears of an invasion. An unexpected decline in German factory orders also worries investors.
In London, the FTSE 100 was down 1.11% at 6,608.63, while in Germany the DAX shed 1.65% to 9,037.91. In France, the CAC 40 lost 1.26% to 4,179.72.
News that Russia has amassed 20,000 combat-ready troops -- reportedly special forces as well as troops with armor, artillery and air defense capabilities -- on its eastern border with Ukraine raised concerns about imminent military intervention. Russian President Vladimir Putin also ordered his government to retaliate against U.S. and European sanctions, albeit without harming Russian consumers.
Geopolitical concerns are also weighing on factory orders in Europe's largest economy.
A report by Germany's Federal Statistics Office released Wednesday showed that factory orders fell 3.2% in June, after dropping 1.6% in May. The 3.2% drop was the greatest in two and a half years, and surprised economists surveyed by Bloomberg News who had forecast a 0.9% increase.
Berlin's Economics Ministry blamed the decline on geopolitical developments and risks, which it said led to "certain holding back" on orders. It predicted a "moderate" industrial economic development in the coming months.
Disappointing corporate earnings also weighed on individual stocks.
In Zurich, reinsurer Swiss Re fell 2.96% to 74.85 Swiss francs, after posting second-quarter earnings that fell far short of expectations. Group net income rose to $802 million from $786 million, with net income at the life and health unit dropping to $48 million from $154 million a year ago.
In Milan, Telecom Italia was down 0.79% at 0.82 euros after posting a 7.6% decline in first-half earnings to 4.35 billion euros. Italy's largest phone company said the first half was affected by recessionary tensions in the domestic market, where signs of recovery are "still very weak," and a slowdown in economic growth in Latin America.
Bucking the downward trend, ING Groep (ING - Get Report) added 1.04% to 9.76 euros after reporting a greater than expected 19.2% jump in second-quarter net income to 1.07 billion euros from 895 million euros last year.
The Dutch financial services group also said that it may repay the remaining 1.025 billion euros still owed to the Dutch state early, depending on the outcome of the ongoing health check by the European Central Bank due to be completed this autumn. ING has been targeting May 2015 for settling the final bill.
German chemical company Lanxess also rose after reporting that second-quarter Ebitda rose 20.1% to 239 million euros. The Cologne-based company also said that as of January 2015, it will merge some of its business units to save costs and streamline its global administration. The stock was up 0.58% at 46.44 euros in Frankfurt.
Asian indices were also down.
In Tokyo, the Nikkei shed 1.05% to 15,160, while in Hong Kong the Hang Seng retreated 0.26% to 24,584.13.