Investors scale down positions - Indices close broadly flat

Giles Watts, Head of Equities, City Index commented: "European markets closed broadly flat to negative on Tuesday as investors moved to scale down positions that had been built up over the last 4 weeks of equity gains.

The boards on the trading floor here at City Index state ‘no significant economic data' and with no significant company news either, traders can often be devoid of reasons to build on positions, which is exactly what has happened today.

The UK's Trade Balance came in much wider than expected this morning which triggered sterling weakness and also serve to lag equity prices too. The sentiment from Fitch Ratings regarding the deterioration of Britain's sovereign credit profile and the fact that they would have concerns should no timely fiscal policy moves be made to curb the deficit has re-raised underlying concerns over the implications of a hung parliament.

The main weakness has been within the miners and the banks and this is where the majority of Index weakness has come from. The mining sector has gained almost 25% in the last 4 weeks to yesterdays high and so naturally this has been one of the first places investors have looked to cash in their profits, particularly with commodity prices weaker today.

The banks have also had a poor session with Standard Chartered the main faller in London with Barclays, Soc Gen, BNP Paribas and Deutsche Bank all trading weaker also.

EADs is the equity headline of the day after the Airbus parent posted heavy losses and scrapped its dividend. This has sent share prices falling over 5% in early trade, though this did attract some of the sharks and prices made a mini recovery to close down on the day by 2%.

Investors are likely to switch their attention to economic data out tomorrow morning with German CPI and Trade Balance figures come out, along with Industrial Production figures from France and the UK."