Europe open: Stocks start the day lower, geopolitical frictions eyed

Stocks are lower at the start of the trading but off their worst levels with investors seemingly hesitant to keep pushing stocks higher despite relatively buoyant data out of France.

As of 0854 BST the benchmark Stoxx 600 was off by 0.25% to 390.29, alongside a rise of 0.25% in Germany's Dax to 12,634.82 and a 0.53% fall in the FTSE Mibtel to 20,673.57.

"The European futures are trading lower today as investors mainly remain in risk-off mode and they are unsure about the direction of the trade," said Naeem Aslam, chief market analyst at Think Markets.

Following the latest NATO summit and a meeting of G7 leaders in Sicily, German chancellor Angela Merkel said "the times we could completely depend on others are, to some extent, over."

Echoing Merkel's remarks, European Central Bank president Mario Draghi told the European parliament on Monday that: "The neo-protectionist stances that have been stated in the United States are certainly of concern."

Also in testimony to the European parliament, Draghi reiterated that extraordinary policy support - including through forward guidance - was needed to ensure euro area inflation would return to rate-setters' 2.0% target over the medium-term.

His words were still weighing on the single currency come Tuesday, with the euro down by 0.13% to 1.1142 against the US dollar.

French household spending was 0.5% higher month-on-month in April, a far weaker outcome than the 1.0% rise projected by economists although the 'miss' was somewhat offset by upwards revisions to data for the previous months.

On a cheerier note, France's gross domestic product expanded at a 0.4% quarter-on-quarter clip during the first three months of the year as investment bounced back.

Consumers in the Eurozone's second largest economy were also more positive in May than had been thought, with INSEE's consumer climate gauge rising from 100.0 in April to 102.0 for May (consensus: 101.0).

Consumer prices in Spain on the other hand dipped by 0.1% month-on-month in May on a harmonised basis, according to INE, with the annual rate retreating by six tenths of a percentage point to 2.0%.

Economists had been expecting a reading 0.0% on the month and 2.1% year-on-year.

Still on the calendar for later on Tuesday, the European Commission was scheduled to release the results of ots industrial and consumer confidence surveys for May at 10:00 BST.

They would be followed by a preliminary reading on German harmonised consumer prices for that same month at 13:00 BST.