Wall Street has opened lower after disappointing jobs data, continuing the pressure on downbeat European markets.
Ahead of Friday's US non-farm payroll figures, the ADP employment report showed a 135,000 increase in private payrolls in May, up from a revised 113,000 in April but lower than the forecast 165,000.
Markets were already weak on a growing number of comments from US Federal Reserve members that its bond buying programme - a key support for share prices - might gradually come to an end. Japan's latest plan to boost its economy underwhelmed investors, pushing the Nikkei down 3.8% and taking it further into correction territory (a more than 10% drop from its peak). Ishaq Siddiqi, market strategist at ETX Capital said:
Interestingly, markets did not welcome the poor ADP release as a sign that the Federal Reserve will refrain from tapering asset purchases. US first quarter productivity was also slightly weaker, gearing the market up for a similarly weak nonfarm payrolls report on Friday.
The ADP report is not an accurate predictor of the official government payrolls report so traders are reserving judgement for now.
Dealers are also awaiting Thursday's meetings at the Bank of England and European Central Bank.
Ahead of all that, the FTSE 100 has fallen 99.11 points - or 1.5% - to 6459.47 while Wall Street is down 60 points or 0.4%. Both Germany and France have lost almost 1%.
