European stocks fell firmly across the board in the opening hour of trading following a weaker session on Wall Street that was marred by concerns over the failure of Senator Mitch McConnell's healthcare reform bill.
The region-wide Stoxx Europe 600 index, the broadest measure of share prices, was marked 0.45% lower at 385.11, with larger declines seen for benchmarks in German (-0.65%) and France (-0.60%). Britain's FTSE was marked 0.6% in the first hour of trading, with benchmark heavyweight basic materials shares leading the declines.
Switzerland's SMI was the only major index in the green, with a solid 2% gain for drugmaker Novartis AG (NVS - Get Report) , which posted stronger-than-expected second quarter earnings Tuesday and lifted the outlook for full-year sales at its Alcon eyecare division.
Novartis said earnings per share hit $1.22 in the three months ending in June, firmly ahead of the FactSet compiled consensus of $1.14 but down from the $1.23 generated over the same period last year. Group sales were tabbed at $12.242 billion, Novartis said, down 2% from last year but ahead of analysts's forecasts of 11.83 billion.
Ericsson SA (ERIC - Get Report) shares were another mover of note, falling the most in more than nine months in early Tuesday trading after the group posted softer-than-expected second quarter earnings Tuesday and cautioned that weaker market conditions could hit its bottom line by as much as $600 million over the next year.
Ericsson shares slumped more than 10.3% in the opening hour of trading in Stockholm to change hands at SEK54.55 each, the biggest single-day decline since Oct. 16, and wiping out all of the stock's gains over the past three months.
Currency markets will likely be in focus this morning with the pound trading at a 10-month high of 1.3101 against the U.S. dollar ahead of the Office for National Statistics' reading of June inflation at 09:30 London time.
The pound has been steadily edging higher against the dollar since Bank of England Governor Mark Carney hinted that the Bank's tolerance for faster inflation may be limited and that he and his colleagues could contemplate removing stimulus - and thus strengthening the currency - if the broader economy were to show signs of improvement.
The euro was also marked noticeably higher against the dollar at 1.1525, the highest in 14 months, as investors prepare for Thursday's rate-setting meeting from the European Central Bank in Frankfurt, where president Mario Draghi may signal a pullback from the Bank's quantitative easing program as soon as this fall.
Overnight in Asia, the broadest measure of regional stocks, the MSCI Asia ex-Japan index, eased from a two-year high while Japan's Nikkei 225 opened for its first day of trading from yesterday's holiday and promptly fell 0.62% to close below the 20,000 point threshold for the first time since July 7.
Wall Street's late slump was pegged, in part, on news that two Republican Senators withdrew support for McConnell's attempt to repeal the Affordable Care Act, known as 'Obamacare'. With only a two-seat majority in the upper chamber, the chances of passing the re-written bill look slim, which makes the odds of successful tax reform less likely between now and the end of the year.
The setback kept the dollar pinned to 10-month lows against a basket of six global currencies, with the dollar index trading 0.37% lower at 94.773 by 09:15 London time.
Global oil prices drifted lower again in overnight trading, with West Texas Intermediate crude futures for August delivery marked 0.32% per barrel lower at $45.87 while Brent contracts for September delivery, the global benchmark, were 0.26% lower from Monday's New York close at $48.29.
Wall Street is slated to open little-changed from Monday's closing levels, with investors keying on earnings from Johnson & Johnson (JNJ - Get Report) , Goldman Sachs (GS - Get Report) , Harley-Davidson (HOG - Get Report) , Lockheed Martin (LMT - Get Report) and Bank of America (BAC - Get Report) .