European share prices traded mixed on Tuesday as investors weighed up the prospect of a new bond-buying scheme later this week from the European Central Bank. Investor sentiment took a knock after Moody\'s downgraded the outlook on the European Union\'s long-term AAA credit rating from stable to negative. Moody\'s said its move reflected credit risks faced by key European Union budget contributors, including Britain, France and Germany, all of which now have negative outlooks due to the continent\'s economic crisis. In late morning deals, London\'s benchmark FTSE 100 index fell 0.84 percent to 5,710.22 points, Frankfurt\'s DAX 30 shed 0.40 percent to 6,986.46 points and in Paris the CAC 40 dropped 0.60 percent to 3,431.71 However, on the upside, Madrid shares rallied 1.14 percent and Milan gained 0.24 percent, lifted by supportive comments from ECB president Mario Draghi. \"Investors here in Europe are sitting on their hands in a \'wait-and-see mode\', as they do not want to get caught in the event of the ECB failing to deliver on a policy that would ease tensions in the debt markets,\" said ETX Capital trader Ishaq Siddiqi. In foreign exchange deals, the euro increased to $1.2605, compared with $1.2593 late in New York on Monday. Europe\'s main markets had risen across the board on Monday on hopes over the outcome of the ECB\'s latest monetary policy meeting that concludes this Thursday. \"Now the summer months are over, September promises much more excitement,\" said sales trader Anita Paluch at Gekko Global Markets. \"After markets ended on high note on Monday, they are more cautious in today\'s session, nervous after Moody\'s expressed its concerns and downgraded the EU outlook, ahead of the much-expected crucial announcement of bond buying plan from ECB on Thursday.\" Across in Brussels, Draghi defended on Monday controversial measures taken to tame the eurozone debt crisis, including buying up government bonds, European MPs said. MEPs said Draghi told them that the central bank had a responsibility to intervene when necessary. Draghi, who made no public comment, said that buying government bonds of up to 3-year maturities on the secondary market did not amount to bailing out spendthrift euro members -- a charge levelled by many German politicians. ECB bond buying in the past was justified, he said according to MEPs who spoke after his briefing, to help stabilise and protect the 17-nation eurozone. \"In order to help the struggling eurozone economies with their costs of debt, Draghi mentioned buying bonds up to three-year maturities,\" added Paluch. \"This has been reflected in the Spanish and Italian short term bonds, falling to multi-months lows.\" In Asia, markets fell on Tuesday in subdued trade, following a public holiday on Wall Street on Monday. Hong Kong ended 0.66 percent lower, Tokyo slipped 0.10 percent, Sydney fell 0.61 percent, Seoul lost 0.29 percent and Shanghai retreated 0.75 percent. The losses come after a broad regional rally on Monday following downbeat manufacturing figures that raised hopes for a fresh round of stimulus measures and monetary easing.