UPDATE 5-Bourses dip as confidence fades.

(From FT Investor (Stories))

LONDON (FT.com) - Fading gains for US stocks left European bourses heading lower on Tuesday afternoon, as all confidence in the markets evaporated.

"There's a plethora of reasons to remain very much on the defensive in these markets, whether we look at P/E ratios still above historical norms, earnings downgrades, no capital expenditure pick-up [or] global economic weaknesses," said Steve Hatton, strategist with spread-betting company Deal4Free.com

The pan-European FTSE Eurotop 100 index was down 0.2 per cent at 1,808.55, while the Xetra Dax index in Frankfurt was 1.2 per cent lower.

In Paris, the CAC 40 held on to a 0.5 per cent gain but London's FTSE 100 was flat. See London markets report

David Buik at Cantor Index said: "Political uncertainty and a supreme loss of investor confidence are the two main reasons why Western stock markets are currently being decimated."

"September and October are living up to their unenviable reputation of being the worst two trading months of the year, clearly exacerbated by the hum of war drums thumping in our ears," he added.