Europe close: Stocks dip ahead of key votes in the UK and Italy
September got off to a poor start with investors' attention firmly trained on politics around the world, but in particular on the UK, as MPs in Westminster returned from their summer recess and were expected to debate key legislation later in the day that might block a no-deal Brexit.
The euro area economy had already been hard hit by the result of the 2016 Brexit referendum and the two years of uncertainty that followed, though expectations were that the fallout could only worsen in case of the so-called 'Hard Brexit' that opposition MPs are working so hard to avoid.
"The political rumblings in the UK, and the worries about US-China trade spat is weighing on sentiment across the board," said David Madden at CMC Markets UK.
Against that backdrop, the benchmark Stoxx 600 was trading 0.31% lower at 379.51, with London's FTSE 100 down 0.29% at 7,261.06.
Other indices on the Continent followed suit, with a drop of 0.36% to 11,910.70 for the German Dax and a dip of 0.26% to 21,396.23 on the FTSE Mibtel.
Nonetheless, while market participants were expecting a successful outcome, the results of a popular vote among the Italian Five Star movement's rank and file on whether to join the Socialist PD party in a coalition government were also set to be announced overnight.
Sterling meanwhile dipped below the psychological 1.20 level against the Greenback during the session, threatening with a further move towards the post-referendum lows.
Away from the Brexit saga, investors were also closely monitoring the headlines around the US-China trade talks.
On Tuesday afternoon, the US President said America was doing well in the trade talks with China and that Beijing had noting to gain by dragging matters out until the 2020 elections.
In parallel, some analysts were growing more concerned, warning clients that more "pain lay ahead".
Meanwhile, Ireland’s central statistics office reported that the nation's unemployment rate edged down to 5.2% in August from 5.3% in July, while Eurostat said prices at factory gates in the 19 Eurozone countries climbed in line with expectations in July after they rose by 0.2%.
Among individual stocks, those with UK exposure moved lower, with banks RBS and Lloyds and housebuilders Barratt Developments and Persimmon all trading down.
Ferguson bucked the trend to jump by 2.12% after the British plumbing products distributor said it will separate its UK operations to focus on its North American business.