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Europe to Open Lower; UK Budget, Portugal Vote on Tap

Reuters and CNBC.com
Wednesday, 23 Mar 2011 | 2:00 AM ET

European stocks are set to open slightly lower on Wednesday ahead of a range of events taking place in the region, the largest of them being the UK Budget and the Portuguese parliament's vote on the government's latest austerity measures.

A trader sits in front of a board displaying Germany's share index DAX at the stock exchange in Frankfurt/Munich, western Germany.
Martin Oeser | AFP | Getty Images
A trader sits in front of a board displaying Germany's share index DAX at the stock exchange in Frankfurt/Munich, western Germany.

Shares in Asia were mixed, with the Nikkei 225 Average down around 2 percent, as investors worried about the nuclear crisis in Japan, as well as ongoing violence in Libya and unrest in the Middle East.

According to BGC Partners, the UK's FTSE 100 index will open 14 points lower at 5,748, while Germany's DAX index could gain 6 points to 6,786, and France's CAC index may fall 8 points to 3,884.

European shares gained for a fourth day on Tuesday, with the pan-European FTSEurofirst 300 index of top shares closing 0.1 percent higher at 1,108.60 points.

Portugal's parliament holds a key vote Wednesday on the government's latest austerity measures. The Socialist government presented its latest plan to parliament on Monday, but the main opposition Social Democrats (PSD) refused to back the measures.

Investors will be keeping a a close eye on the vote, as it could spell the collapse of the government and further trouble for the debt-battered country.

Prime Minister Jose Socrates has said a rejection would exacerbate the country's crippling debt crisis and force it to follow Greece and Ireland in seeking a bailout.

In the UK, Chancellor George Osborne will present his 2011 budget to parliament on Wednesday. The government plans to virtually eliminate the budget deficit over the next four years, a goal its opponents say risks driving Britain back into recession.

British inflation surged to a 28-month high of 4.4 percent last month, figures released Tuesday showed, reviving speculation that the Bank of England will not wait much longer to raise interest rates.

There is no macroeconomic data set for release Wednesday.

Contact Europe: Economy

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