European markets follow Wall Street lower

Stock markets turn lower as investors fret about US President Donald Trump's ability to push through promised reforms

European stock markets turned lower on Tuesday, dragged down by losses on Wall Street where investors fretted about US President Donald Trump's ability to push through his promised reforms, dealers said.

"The markets have reversed" because of growing concern about possible opposition to Trump's reforms within Republican party, said Gregori Volokhine of Meeschaert Financial Services.

In particular, Trump's plans to dismantle the "Obamacare" health care law are under scrutiny as Republicans are deeply divided as to what the replacement health care plan should look like.

If Trump fails to garner sufficient support to scrap Obamaare, "that will suggest relations with Congress are even more complicated than anticipated," said Daniel Larrouturou of the independent asset manager Diamant Bleu Gestion.

"That creates political uncertainty ... which is hitting Wall Street and dragging the European markets down with it," Larrouturou said.

On this side of the Atlantic, stock prices in London were hit after official data showed British 12-month inflation soared to 2.3 percent in February -- reaching the highest level since 2013.

Higher inflation translates into rising company costs and weaker consumer expenditure.

"Rising prices are bad for most stocks as they can push up input costs, which makes everything more expensive for a corporate," said City Index analyst Kathleen Brooks.

"However, consumer stocks -- food producers, clothing retailers, restaurants -- are particularly badly hit as rising prices can erode consumer spending."

The news also sent sterling flying higher on expectations of rising interest rates.

The stronger pound weighs on FTSE-listed multinational companies that earn income abroad.

- Asia fizzes higher -

On Monday, stocks had been weighed down by trade fears after G20 finance chiefs failed to renew their anti-protectionist pledge at a weekend gathering, fanning concerns over US President Donald Trump's "America First" push.

However, Asian markets mostly fizzed higher Tuesday as investors snapped up bargain shares.

Hong Kong stocks won 0.4 percent -- marking four days of gains that have pushed the Hang Seng Index to its highest level since July 2015.

Tokyo however lost 0.3 percent as traders returned from a long weekend to find the yen had strengthened significantly against the dollar.

The euro rose against the dollar on relief that centrist Emmanuel Macron came out on top in the first French presidential debate Monday, seeing off his closest rival, the far-right, anti-EU candidate Marine Le Pen.

- Key figures around 1645 GMT -

New York - Dow: UP 0.3 percent at 20,961.34 points

London - FTSE 100: DOWN 0.7 percent at 7,378.34 (close)

Frankfurt - DAX 30: DOWN 0.8 percent at 11,962.13 (close)

Paris - CAC 40: DOWN 0.2 percent at 5,002.42 (close)

EURO STOXX 50: DOWN 0.3 percent at 3,426.13 (close)

Hong Kong - Hang Seng: UP 0.4 percent at 24,593.12 (close)

Shanghai - Composite: UP 0.3 percent at 3,261.61 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 19,455.88 (close)

Euro/dollar: FLAT at $1.0815

Pound/dollar: UP at $1.2485 from $1.2467

Dollar/yen: DOWN at 112.01 yen from 112.44 yen

Oil - West Texas Intermediate: DOWN 61 cents at $48.30 per barrel

Oil - Brent North Sea: DOWN 50 cents at $51.12