European markets drop as US debt battle drags on

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy Markets continued to hold their breath on Tuesday as top US politicians failed to solve the impasse over the country’s debt ceiling. With the clock continuing to tick down towards the US debt ceiling deadline of June 1, and US policymakers no nearer to a deal, European markets are finding little inclination to move higher Micheal Hewson, CMC Markets This would lead to an immediate shutdown of large swathes of the US economy and spark a major devaluation of both the dollar and US treasuries, which would send disastrous ripples through global markets. “With the clock continuing to tick down towards the US debt ceiling deadline of June 1, and US policymakers no nearer to a deal, European markets are finding little inclination to move higher, with the Dax and Cac 40 sliding back for the second day in a row,” CMC Markets analyst Micheal Hewson said. “The luxury sector is leading the weakness in Europe, the recent outperformance coming to a sudden end with big falls for the likes of LVMH, Hermes and Burberry who are all sharply lower, after Deutsche Bank cited elevated valuations in the sector.” By the end of the day, London’s FTSE 100 had dropped 0.1%, or 8.04 points, ending at 7,762.92.