Investing.com - European markets edged lower on Tuesday, as a political deadlock in Germany continued to weigh on investors' confidence.

The EURO STOXX 50 fell 0.10%, France’s CAC 40 dipped 0.01%, while Germany’s DAX 30 was down 0.09% by 03:40 a.m. ET (07:40 GMT).

Markets were jittery after German Chancellor Angela Merkel failed to form a government coalition on Sunday, when the Free Democrats Party (FDP) unexpectedly left the negociation table.

Merkel said on Monday that she would prefer a new election to a minority government. However, German President Frank-Walter Steinmeier said that political parties owed it to their voters to try to form a government.

Financial stocks were mostly higher, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) added 0.16% and 0.41%, while Germany's Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn) gained 0.78% and 0.38%.

Among peripheral lenders, Italy's Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) edged up 0.14% and 0.30% respectively. Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) underperformed however, with shars down 0.07% and 0.77%.

Elsewhere, Enel (MI:ENEI) saw shares rise 0.38% after the Italian energy group announced that it is planning €24.6 billion in capital expenditure over the next three years, with about €5.3 billion in digitalization.

The report came a day after German utility RWE AG ST O.N. (DE:RWEG) was said to be planning to cut its €16.8-billion stake in retail business Innogy, which could potentially involve a deal with Enel.

In London, FTSE 100 slipped 0.12%, weighed by Compass Group PLC (LON:CPG), whose shares plummeted 3.90% after the caterer reported a 15% increase in full-year profits and said a slowdown at its commodities-linked offshore business is starting to reverse.

Kingfisher (LON:KGF) Plc added to losses, as shares declined 1.12% after the home improvement retailer reported a decline in third-quarter underlying sales in its latest quarter, weighed by a weak performance in France.

Meanwhile, mining stocks were mixed on the commodity-heavy index. Shares in Glencore (LON:GLEN) dropped 0.50% and Rio Tinto (LON:RIO) dipped 0.07%, while BHP Billiton (LON:BLT) edged up 0.15%.

Financial stocks were mostly higher, as Lloyds Banking (LON:LLOY) eased up 0.04% and the Royal Bank of Scotland (LON:RBS) inched 0.07% higher, while Barclays (LON:BARC) rose 0.24%. HSBC Holdings (LON:HSBA) underperformed, with shares down 0.36%.

EasyJet PLC (LON:EZJ) was one of the top performers on the index for a second consecutive session, with shares up 4.54% after the airliner predicted a price increase this winter as the collapse of rivals including Monarch Airlines Ltd. removes excess capacity in some of the company's biggest markets.

In the U.S., equity markets pointed to a steady to lower open. The Dow Jones Industrial Average futures pointed to a 0.02% loss, S&P 500 futures signaled a 0.03% dip, while the Nasdaq 100 futures indicated a 0.02% downtick.

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