European shares were set to open flat to slightly lower Thursday, continuing to pause from strong gains earlier in the week
European shares fell on Wednesday, snapping their longest winning run in six months after Moody's said it could downgrade Spain's debt rating, with banks featuring among the worst performers.
European heads of state meet in Brussels on Thursday for a summit which will seek to address ongoing sovereign debt concerns, with Spain and Portugal still on investors' radars.
Piers Curran, head of trading at Amplify Trading told CNBC on Wednesday he thought Portugal would request a bailout within a month. Spain, however, would not need financial assistance, he said.
Three-month borrowing costs nearly doubled from the previous sale in Portugal's last debt auction of the year on Wednesday, reflecting persistent investor concerns about the debt-ridden country.
Spain aims to sell between 2 billion and 3 billion euros in 10-and 15-year bonds in an auction on Thursday which will be watched carefully after Moody's said on Wednesday it would consider downgrading the country's credit rating.
German Chancellor Angela Merkel appeared to soften her stance on aid for heavily indebted European peers, saying "nobody in Europe will be abandoned. Europe will succeed together." But Merkel reiterated her opposition to issuing euro zone bonds.
Ireland's parliament on Wednesday approved the 85 billion euro bailout it stands to receive from the EU and the IMF.
UK car sales figures for November and Irish third-quarter gross domestic product numbers are among economic data due out on Thursday.
Investors will also be watching EU inflation data for November and the EU labor cost index for the third quarter.