2017.01.1606:49:00UTC+00European Markets Lower as FTSE Extends Rally

Stocks across Europe were trading lower in early deals, pulled down by banking and auto stocks, while the weakness in the pound supported Britain's FTSE to advance to a new record peak. The focus of investors is on this week's policy meeting of the European Central Bank, seeking clarity on when the institution could start to curtail its stimulus measures.

The pan European STOXX index was 1.3 percent lower, while the U.K.'s FTSE 100 edged up 0.1 percent, as the stronger mining sector supported it to reach a new record peak. In the banking sector, the Italian banking index underperformed with a decline of 1.5 percent after DBRS trimmed Italy's credit rating in a move that might raise borrowing costs. Shares in France's Essilor soared 14 percent while Luxottica jumped nearly nine percent following an agreement on a 46-billion euro merger deal to combine the biggest manufacturer and retailer in eyewear.

The pound weakened to a three-month low in Asian trading as investors are concerned that Prime Minister Theresa May could outline plans for a “hard Brexit".