Markets feel the heat as political temperatures rise

European markets edged lower on Tuesday as investors shifted their attention to the general election in the UK next week and worries that growth in the Eurozone is set to fade, following comments from the head of the European Central Bank. Banks led the charge lower after a broker downgrade and concerns over a potential early election in Italy.

On Wall Street, US stocks opened lower as both the S&P and Nasdaq slipped from last week's record levels. Shares of Amazon took centre stage after hitting an intraday record, exceeding $1,000 a share for the first time ever on Tuesday.

Banks struggle, Italy’s early vote

Banking stocks were among the worst performing sectors on Tuesday following remarks by European Central Bank President Mario Draghi and a Deutsche Bank research note. Both stated that European banks no longer had support from a valuation perspective, and growth in the euro area is set to fade.

Further weakness stemmed from the fact that Deutsche Bank lowered banks to underweight from a benchmark rating, saying a slowdown in Eurozone growth is likely to weigh on the sector in the coming months.

Fears of an early general election in Italy also hit the banking sector. Italians must head to the polls no later than spring 2018. Matteo Renzi, leader of Italy’s ruling centre-left Democratic Party, said in an interview that it would make sense to have a vote in September, when a German election is also planned.

Shares in Banco BPM led the losses. Its shares fell 1.7%. Shares of Barclays and Lloyds were also lower, though HSBC closed the session in the green.

AIG struggles, Ryanair up

British Airways owner IAG was one of the heaviest fallers on Tuesday. Shares of IAG tumbled 1.71% after a far-reaching computer failure left many passengers grounded over the weekend. The airline said on Tuesday it was back to full schedule at London’s Heathrow and Gatwick airports. Shares recovered slightly by the end of session, closing 0.58% down.

Shares in rival Ryanair were up 1.8% though, after the discount carrier posted a rise in profits for the past financial year. Europe’s largest carrier by passenger numbers gave profit figures that were largely in line, and a stock buyback announcement appeared to boost sentiment in the stock.

Amazon touches intraday milestone

Amazon shares were in the spotlight on Tuesday after hitting an intraday record. Shares exceeded $1,000 a share, thereby joining a unique club of companies whose share price carried a four-digit price tag.

Amazon shares hit $1,001.20 just as market opened. According to Fact Set data, Amazon shares are up around 33% so far in 2017. Shares closed higher on Tuesday at a price of $996.70.