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Europe Stocks Seen Unchanged After EU Decision

European shares are expected to open flat Friday, though concerns about the euro zone debt crisis linger and could weigh on markets.

Trader at London Stock Exchange, England.
AP
Trader at London Stock Exchange, England.

European Union leaders have agreed to create a permanent financial safety net from 2013 and the European Central Bank moved to increase its firepower to fight the debt crisis that has rocked the euro zone.

But at Germany's insistence, the 27 leaders said the long-term crisis-resolution mechanism, to be added to the EU's governing treaty, would only be activated "if indispensable to safeguard the stability of the euro as a whole".

European stocks ended higher on Thursday, helped by gains in food and beverages shares following a jump in Danisco stocks on strong results, though worries about the euro zone debt situation weighed on sentiment.

European Union heads of state gather in Brussels for a second day on Friday to address the continuing European debt crisis.

The European Central Bank almost doubled its capital to cope with increased credit risk and market volatility ahead of the summit which will be dominated by the search for ways to stop market contagion engulfing more member states.

The meeting on Thursday came just after a Spanish debt auction in which the country was forced to pay a hefty premium.

Moody's added to pressure on the country's sovereign debt on Wednesday when it put its credit rating for Spain on review, citing concerns over Spain's mounting debt.

The Bank of England releases its Financial Stability report on Friday, as well as data on external claims of UK-owned banks.

Other data to watch includes Germany's Ifo business climate index and EU figures on foreign trade and construction output for October.

Roche is among stocks that will be in the spotlight on Friday after the US Food and Drug Administration said late on Thursday it would begin the process to remove the breast cancer indication from the label of the company's Avastin drug.

The decision could shave $1 billion from annual sales as insurers refuse coverage.

Contact Europe: Economy

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