European markets set to tumble at the open, reversing positive sentiment

  • European stocks are expected to open sharply lower on Wednesday, reversing mostly positive trade this week.
  • The U.K.'s FTSE index is seen opening 40 points lower at 7,039, Germany's DAX 103 points lower at 15,092, France's CAC 40 down 42 points at 6,530 and Italy's FTSE MIB 175 points lower at 25,453, according to IG data.

European stocks are expected to open sharply lower on Wednesday, reversing mostly positive trade this week.

The U.K.'s FTSE index is seen opening 40 points lower at 7,039, Germany's DAX 103 points lower at 15,092, France's CAC 40 down 42 points at 6,530 and Italy's FTSE MIB 175 points lower at 25,453, according to online trading platform IG.

The lower open forecast for European markets comes after a rally in the region on Tuesday with regional investors brushing off losses on Wall Street earlier in the week.

A reversal of positive sentiment does not apply to Europe alone. U.S. stock futures fell in overnight trading too, and shares in Asia-Pacific were mostly lower in Wednesday trade.

Futures on the Dow Jones Industrial Average slipped 84 points. S&P 500 futures and Nasdaq 100 futures traded in negative territory. In Asia overnight, Japan's Nikkei 225 shed earlier gains to fall 1.47%, while the Topix index slipped 0.65%. South Korea's Kospi fell 1.12%. Mainland Chinese markets remain closed on Wednesday for the holidays.

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On the corporate front in Europe on Wednesday, Tesco releases half-year results and data releases include the latest German industrial orders and most recent reading of Spain's industrial output.

Investors in the region could be keeping an eye on U.S. data on Wednesday for more indications on the country's economic health with the ADP private payrolls report for September set to be released Wednesday. The closely watched nonfarm payrolls report for September is slated for release on Friday.

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– CNBC's Hannah Miao and Eustance Huang contributed to this market report.

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