Europe Stocks Seen Lower; Greek PM to Reshuffle Cabinet
European stocks were expected to open lower on Thursday after falling sharply by Wednesday’s close, with sentiment hit by uncertainty over how Greek debt can be contained and weak manufacturing data from the US.
Greek Prime Minister George Papandreou plans to reshuffle the cabinet and ask for a vote of confidence from his parliamentary group following big anti-austerity protests Wednesday.
Sources told Reuters Wednesday that he had offered his resignation if this would mean a government of national unity would push through reforms needed to save Greece from default.
Britain's FTSE 100 index is seen opening down 18-30 points, or 0.5 percent on Thursday, according to financial bookmakers, adding to a slide on Wednesday in tandem with a sharp sell-off on Wall Street and in Asia as worries mount regarding Greece's debt crisis.
Futures for Germany's DAX and for France's CAC were down 0.5-0.7 percent.
London’s FTSE closed down 60.58 points on Wednesday to 5742.55 to its lowest closing value since March 18 2011.
The DAX was down 89.71 points to 7115.08 and the CAC 40 closed down 57.73 points to 3806.85.
Peripheral stocks were under pressure, with the Thomson Reuters Peripheral Euro Zone Index down 3.4 percent as euro zone finance ministers failed to agree on how to make private creditors contribute to a fresh bailout package for Greece.
In the US stocks closed sharply lower as the dollar jumped on fears of contagion from Greek debt and after Papandreou's announcement that he will form a new government.
Manufacturing data showing New York State unexpectedly contracted in June also fueled market concerns over the strength of the US economy, with Asian stocks opening lower on Thursday.
The euro skidded to $1.4154, lows not seen since May 27, before recovering some ground.
Economic data out on Thursday includes the European Central Bank’s monthly bulletin which will be available from 9:00 London time.
CPI data from Italy for May will also be available from 9:00 and first quarter employment figures for the European Union will be out at 10:00.
In France, the IEA oil market report for June will be available from 9:00 London time.
In the UK, retail sales figures for May and car production data will be released at 9:30.
French finance minister and frontrunner for the IMF managing director post Christine Lagarde will give a speech in Paris on the international finance system at 9:00 London time.
In London, the first formal meeting of the interim Financial Policy Committee will take place, with Bank of England governor Mervyn King among the committee members.
The St Petersburg International Economic Forum (SPIEF) will get underway on Thursday, with Russian president Dmitry Medvedev, Chinese premier Hu Jintao and Spanish Prime Minister Jose Luis Zapatero all expected to attend.