European stocks were expected to open sharply lower on Thursday after tumbling on Wednesday in response to US data showing a slowdown in manufacturing activity in May and a lower than expected increase in private sector jobs.
Financial spreadbetters expected Britain’s FTSE 100 to open 59 points lower, Germany’s DAX to open as much as 87 points lower and the CAC in France to be down by 45 points.
A fresh downgrade of Greece’s credit rating by rating agency Moody’s further into junk territory to the extermely speculative level of Caa1 from B1 over debt restructuring worries and uncertainty over the conditions of further EU/IMF aid on Wednesday occurred after markets closed in Europe; but US stocks plunged by more than two percent on the news.
In London, the FTSE fell 1.2 percent to 5,928.61 which the CAC 40 dropped 1.5 percent to 3,964.81 and Germany’s DAX also slipped by 1.05 percent, closing at 7,217.43 Wednesday.
Asian stocks dropped on Thursday with investors nervous by a sell-off on Wall Street overnight and sluggish economic data from the US.
The euro edged up against the dollar on Thursday but remained well below a recent four-week high following the news of Moody’s Greek downgrade.
The dollar remained close to a one-month low against a basket of currencies and close to a record low to the Swiss franc after the release of worse-than-expected jobs and manufacturing data.
In Germany, European Central Bank President Jean Claude Trichet will be presented with the International Charlemagne Prize of Aachen on Thursday and is expected to give a speech at 10:15 London time upon receiving the prize.
German Chancellor Angela Merkel will complete her three day tour of India and Singapore on Thursday.
German and French markets will remain open despite public holidays in both countries, but the Swiss stock market is closed.
Spanish unemployment data for May will be released at 8:00 London time, followed by construction data for the UK at 9:30.