At 0632 GMT, futures for the Euro STOXX 50, Germany's DAX and London's FTSE 100 were all down 0.3-0.4 percent, while France's CAC futures were
0.1 percent lower.
Madrid's sale of 12- and 18-month treasury bills on Tuesday was expected to see yields jump from the previous tender, reflecting a shift in market concerns over its deficit and banking sector that has pushed longer term risk premiums above 6 percent, threatening a new crisis in the euro zone.
Spain's debt problems were exacerbated by sluggish economic growth, accentuated by swinging austerity measures, leading the country's economy minister Luis de Guindos to say on Monday gross domestic product in the first quarter of 2012 was likely to have fallen a similar amount to the October-December period of 2011, when the economy shrank 0.3 percent quarter-on-quarter.
"The party is over. There are signs of weakness in each of the three major zones of the equity world: America, emerging and - most evidently - Europe," Cheuvreux said in a note.
"Equity markets have voted against the (euro zone)'s 'austerity first' agenda which has trapped Spain in the paradox of toil."
Spain's oil major Repsol was likely to come under pressure after Argentina announced plans to seize control of energy company YPF, controlled by Repsol, sending YPF's shares in New York down 11.2 percent.
"All eyes will fall on Repsol who look set to be taken to the cleaners on the open on the news of YPF's renationalisation, which has implications to the broader market not just because Repsol has a 7 percent index weighting, but the last thing Spain needs right now is a trade war," Chris Weston, an institutional dealer at IG Markets, said.
"With YPF accounting for 25 percent of operating income in 2011, this will be a bitter pill to swallow for any company."
Basic resources shares were also under scrutiny after the world's second biggest producer of iron ore, Rio Tinto , reported worse falls than expected in iron ore and copper production in the first quarter.
Of further interest to miners, a powerful 6.5 magnitude earthquake struck near Chile's port of Valparaiso early on Tuesday, shaking buildings as far away as the capital Santiago.
State mining giant Codelco, the world's No.1 copper producer, said its operations were not impacted by the quake, as did global miner Anglo American.
Germany's ZEW monthly survey of economic sentiment will offer another signal on the state of Europe's largest economy at 0900 GMT, with any sign of weakness seen as a possible sell trigger.
The index of German analyst and investor sentiment was expected to have eased to 20 in April, according to analysts polled by Reuters, after hitting its highest level since June 2010 at 22.3 in the previous month.
In the United States, housing data is scheduled for release at 1230 GMT and industrial output figures due at 1315 GMT, providing a possible positive catalyst after robust retail sales data lifted the markets on Monday. (source http://uk.reuters.com )
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