European Shares Set to Rise After Selloff


European shares are expected to stage a modest rise at the start of trade on Wednesday, stabilizing somewhat after the previous session's sharp sell-off, ahead of a key reading of German business sentiment and the minutes from the Bank of England's last policy meeting.

Financial spreadbetters in London are looking for Britain's FTSE 100 to open up 2 to 3 points; Germany's DAX to open 1 to 8 points higher and France's CAC-40 to open unchanged to 4 points higher.

The FTSEurofirst 300 index of top European shares on Tuesday slid 2 percent in its worst one-day slide in two months.

Inflation worries, fueled by crude oil topping $129 a barrel and soft earnings from two of the largest U.S. retailers -- Target and Home Depot -- pushed Wall Street stocks down between 0.9 and 1.5 percent on Tuesday.

Troubling inflation data from the United States and Germany this week follows last week's unwelcome pick-up in price pressures in Britain, offering policymakers less scope to deliver equities-supportive rate cuts.

The BoE's policy-setting committee releases its May minutes and a Reuters poll show economists are looking for an 8-1 vote to keep rates unchanged at 5.00 percent.

Germany's IFO data is expected to show business sentiment in the euro zone's largest economy fell to its lowest since January 2006, driven by record-high oil prices and the strong euro.

A number of index-heavyweights trade without the right to dividend on the FTSE 100 and are expected to take up to 8.3 points off the index. HSBC, Unilever and J Sainsbury are among those companies going ex-div.