European Stocks Decline As Investors Maintain Caution

Most of the European markets fell Tuesday as investors remained cautious waiting for the euro zone policymakers to come up with stimulus measures to rejuvenate the faltering economy.

The French CAC 40 index dropped 0.42 percent or 14.53 points to 3448.30. Shares of Carrefour SA fell 1.01 percent and those of Vinci SA declined 0.69 percent.

London's FTSE 100 index marginally dropped 0.04 percent or 2.51 points to 5774.09. Shares of Bunzl Plc fell 1.71 percent and those of Kazakhmys Plc declined 1.44 percent.

The German DAX 30 index fell 0.60 percent or 42.09 points to 7005.36. Shares of Deutsche Bank AG dropped 1.09 percent and shares of Bayer AG declined 0.96 percent.

Spain's IBEX 35 was down 0.48 percent or 35.70 points to 7363.20. Shares of Bankia SA fell 2.54 percent and those of Telefonica SA dropped 1.02 percent.

Spanish Prime Minister Mariano Rajoy will meet European Council President Herman van Rompuy in Madrid Tuesday and the main agenda of their meeting is expected to be the economic crisis situation and measures to be taken by Spain to tackle it. The National Statistics Institute reported Monday that Spain's economy contracted 0.3 percent in 2010 and grew 0.4 percent in 2011. The Spanish government has estimated that the country's economy will contract 1.5 percent in 2012.

Market players are hoping for an announcement of the stimulus measures by the European Central Bank as investors feel that bold measures, including easing in the monetary policy, will give the much-needed thrust to boost liquidity in the euro zone financial system.

ECB President Mario Draghi will address at the Jackson Hole Symposium Saturday. The faltering economic growth is expected to put pressure on the ECB to announce bold stimulus measures to boost the financial condition. It is especially hoped that the central bank will buy sovereign bonds that would reduce the escalating borrowing costs faced by Spain and Italy.