European stocks unable to shrug off Dubai debt worries

Nick Serff, Market Analyst, City Index commented: "Better then excepted Chicago PMI numbers released at 14:45 London time briefly helped lift European stock markets from their earlier falls. The Purchasing Management Index jumped to 56.1 for November, up from 54.2 in October and higher than the forecasted 53.7. This was the biggest reading for the index since August 2008 and could point to a higher reading for ISM tomorrow. A reading above 50 indicates expansion in the regional Midwest economy.

Bank shares, although off their worst levels for the day, continued to perform badly through the afternoon as concerns over the Dubai World debt problem continued. Fears remained after the Dubai Government said on Monday afternoon that it would not be responsible for the debts of Dubai World. The knock on effect of this could be seen lasting throughout the week.

Mining shares were some of the main gainers from this afternoon's rally, as the price of gold and precious metals stabilized after recent falls. The sector has offered some good short term trading opportunities for investors as prices continue to remain volatile. The recent buying of gold by central banks could also help underpin stocks and spot prices over the short term.

Tomorrow's session could remain volatile for investors with the release of a whole raft of macroeconomic data. Nationwide house price data will be closely eyed at 7am London time, followed by Eurozone Unemployment data at 10:00. U.S figures expected tomorrow afternoon include ISM Manufacturing and Pending Homes sales."