LONDON (The Deal) -- European stock markets fell sharply on Tuesday after another Federal Reserve official suggested rates could rise as early as this year and as declining copper prices weighed on miners.
Atlanta Fed Chief Dennis Lochkhart said on Monday he expects monetary policy to be tightened this year and concern about global markets turmoil to prove temporary. His comments echoed sentiments expressed by Fed officials from San Francisco, St Louis and Richmond, Va.
In London, the FTSE 100 tumbled 2.05% to 5,982.36. In Frankfurt, the DAX slumped 2.02% to 9,747.50. The CAC 40 in Paris declined 2.57% to 4,467.80. The Athens benchmark was down 1.38% at 684.00.
Copper prices tumbled 2.3%, hitting mining shares including Glencore, which was down more than 8%. Anglo American got an additional knock as Credit Suisse Group analysts downgraded the stock to neutral from outperform. Its shares were down almost 7%.
London Stock Exchange Group (LDNXF) fell close to 3% after Bloomberg reported that a plan to sell fund manager Russell Investments to China's Citic Securities for about $1.8 billion will probably unravel.
Roadside recovery provider AA was down more than 8% after reporting declining first-half revenue and warning of the impact of a pending rise in insurance premium tax.
Irn Bru maker AG Barr slumped almost 5% after announcing declining first-half revenue and predicting market conditions will remain tough. It said sales are lagging its internal target and it expects full-year results to be broadly similar to last year's levels. The beverages company predicts a return to growth in 2016.
U.K. engineering company Meggitt (MEGGF) was down almost 2% after announcing a $340 million deal to buy aerospace components maker Edac from Greenbriar Equity and other shareholders, and declaring it will suspend a share buyback program for the rest of the year.
In Frankfurt, Volkswagen (VLKAF) led the DAX fallers, declining 6% and pulling rival carmakers Daimler, Bayerische-Motoren Werke and tiremaker Continental down with it as South Korean's environment ministry said it would investigate the emissions compliance of its diesel cars. The news came after the carmaker admitted it had cheated in tests in the U.S.
Volkswagen said it will take a €6.5 billion ($7.3 billion) provision related to the fallout from flawed emissions tests in the third quarter.
Asian markets were mixed on Tuesday.
In Hong Kong the Hang Seng closed up 0.18% at 21,796.58. On mainland China, the Shanghai Composite was up 0.92% at 3,185.62. Tokyo markets were closed for the second day of a three-day holiday.Must Read: 5 Breakout Stocks Under $10 Set to Soar