European Shares Seen Higher Ahead of Greek Confidence Vote
European stocks were expected to edge higher on Tuesday after falling on Monday as euro zone finance ministers gave Greece two weeks to approve further austerity measures in exchange for a 12 billion euro bailout package and ahead of a vote of confidence in the government of Prime Minister George Papandreou on Tuesday evening.
Financial spreadbetters expected Britain's FTSE 100 to open 8 to 18 points higher, or as much as 0.3 percent, Germany's DAX to gain 17 to 27 points, or as much as 0.4 percent, and France's CAC40 to rise 6 to 14 points, or as much as 0.4 percent.
On Monday all European indices were down for the third of the last four trading days following a delay in the release of a fresh aid package for Greece, but acting IMF head John Lipsky raised some hopeswhen he announced a revision of the euro zone’s growth forecast to 2 percent, up from 1.6 percent.
London’s FTSE closed down 21.55 points to 5693.39, the DAX was down 13.94 points to 7150.21 and France’s CAC 40 was also down 24.08 points to 3799.66.
In the US stocks rallied to finish higher on Monday as fears over Greek debt subsided and investors took advantage of beaten down stocks.
In Asia stocks edged higher on Tuesday amid some caution as investors remain uncertain about Greek debt.
The euro fell again on Monday against the Swiss franc and could fall further if investors continue to be risk averse amid fears that Greece may not receive another round of financial aid and be forced to default.
The single currency hit a session low of 1.2015 Swiss francs and against the dollar was little changed, recovering from losses that took it as low as $1.41910.
It last stood at $1.4333.
EU and IMF inspectors will arrive in Greece on Tuesday ahead of a vote of confidence in the government of George Papandreou who named a new cabinet last week in a bid to gain support for further spending cuts and tax rises.
The vote is expected at 10:00 pm London time.
French Finance Minister and frontrunner for the IMF Managing Director post Christine Lagarde will travel to Washington DC on Tuesday afternoon in a visit that is expected to continue until Thursday.
In Paris, Russian Prime Minister Vladimir Putin will meet with his French counterpart Francois Fillon, with a joint press conference due at 11:50 London time.
Economic data out on Tuesday includes June’s ZEW Indicator of Economic Sentiment for Germany at 10:00 London time and the Confederation of British Industry Industrial Trends Survey for June which will be released in the UK at 10:00.