European stock markets eased Tuesday and London fell heavily after data showed that consumer price inflation in the euro area fell in August and manufacturing activity began to soften.

In Asia earlier, stock prices had been buoyed in part by a survey of Chinese manufacturing that indicated a pick-up in activity, offering reassurance that the world’s second biggest economy is recovering from the coronavirus pandemic crisis.

But IG analyst Chris Beauchamp said caution was warranted ahead of critical US elections in November.

“With the US election now some eight weeks away there will be heightened expectations of renewed volatility,” he predicted.

On Wall Street, the Dow Jones index was 0.2 percent lower as trading got underway.

Signs of a new pick-up in infections around the world and a lack of any movement on a new US stimulus package for the world’s top economy also appeared to be keeping many buyers

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