European shares were expected to inch lower in early trade on Wednesday as investors' appetite for riskier assets was seen falling after euro zone ministers failed to finalise a deal on a new bailout for Greece.
Financial spreadbetters expected Britain's FTSE 100 to open 3 to 4 points lower, Germany's DAX to open 5 to 9 points down and France's CAC40 to open 1 to 7 points lower.
A general strike is due to take place in Greece later on Wednesday in response to fresh austerity measures agreed by the Greek government with the EU and IMF to secure a bailout.
Markets rose sharply on Tuesday in a relief rally, as Chinese data suggested it could avoid a hard landing, helping to ease global growth concerns.
London’s FTSE closed up 29.67 points on Tuesday to 5803.13, the DAX was up 119.65 points to 7204.79 and the CAC40 in Paris closed up 56.97 points at 3864.58.
Heavyweight banks were among the gainers in an across the board rally, with BNP Paribas, Banco Santander and UniCredit rising between 2.2 and 2.5 percent.
In the US, stocks slipped slightly from session highs on Tuesday’s close, but still closed broadly higher to post their biggest gain in almost two months, led by gains in the energy sector and helped by better than expected US retail sales figures.
Asian stocks were mixed on Wednesday as positive data from the US and China was offset by worries that China’s monetary tightening cycle could derail growth.
The euro which last Friday hit a record low against the Swiss franc at under 1.2000, jumped to a high of 1.2254 francs following the release of US sales data and better than predicted Chinese inflation figures.
The single currency also gained against the dollar, but was thwarted by resistance at around $1.4500.
Economic data released on Wednesday will include May CPI figures for France which will be available at 6:30 London time, followed by the first quarter house price index for Spain at 8:00.
In the UK, monthly unemployment data will be released at 9:30 local time and EU industrial production figures for April will be out at 10:00.
Corporate releases include a first quarter statement by British retailer Sainsbury’s which showed a 4.8 percent jump in like-for-like sales, first quarter results for Spainish fashion retailer Inditex and May sales figures for H & M.
In Portugal, a debt repayment of around 4.9 billion euros is due to be paid to bondholders on Wednesday.
French President Nicholas Sarkozy will hold a working lunch with EU council president Herman Van Rompuy ahead of a meeting between EU heads of state June 23-24.
In London, British finance minister George Osborne will make his annual Mansion House speech at the London Corporation’s Bankers and Merchants Dinner, where Bank of England governor Mervyn King is also due to speak.