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Chinese Manufacturing to Lift European Stocks

CNBC.com and Reuters
Wednesday, 1 Dec 2010 | 2:14 AM ET

European stock index futures pointed to a rebound for equities on Wednesday, with better-than-expected Chinese manufacturing data helping to bolster positive sentiment.

Sharon Lorimer

European stocks ended flat on Tuesday, struggling to halt a sharp three-week sell-off as investors continued to dump banking shares on mounting fears of a domino effect in the euro zone after Ireland's bailout.

Chancellor George Osborne told CNBC late on Tuesday that the aid the UK offered Ireland on top of its loan from the European Union and the International Monetary Fund was "a very special case."

On Wednesday, CNBC speaks exclusively to Spanish Prime Minister Jose Luis Zapatero.

Investors sold off government bonds from Spain, Portugal and Italy on Tuesday amid worries that Europe's debt crisis has not been contained by Ireland's bailout but will force more expensive rescue efforts.

Charlie Morris, head of Absolute Return at HSBC Global Asset Management told CNBC's Closing Bell the high risk premiums were "unfair", adding: "At some point investors are going to see these bonds are too cheap."

Portugalwill aim to sell 500 million euro in 12-month treasury bills in an auction Wednesday. The auction will provide an indication of investors' concerns over the country's public finances.

Manufacturing data is due for several euro zone countries including Germany, as well as for the whole of the euro zone on Wednesday and will offer clues on the health of the economy.

Contact Europe: Economy

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