Europe Economy

Europe Stocks Seen Mixed; Greek Austerity in Focus

Reuters and

European stocks were expected to open mixed on Wednesday after posting the biggest gain in two months on Tuesday amid optimism that Greece will receive a fresh bailout and avoid defaulting.

The FTSE is expected to open 5-10 points lower or as much as 0.2 percent, Germany’s DAX is predicted to be up 5 points to 7290 and the CAC 40 in Paris is called 4 points higher at 3881.

The Greek parliament backed Prime Minister George Papandreou’s new cabinet in a vote of confidence late Tuesday night in a step towards implementing fresh austerity measures, but there are no guarantees that further spending cuts and tax rises in Greece will be passed and a default avoided.

Asian stocks opened stronger on Wednesday as investors grew more optimistic over Greece following the confidence vote, while in the U.S. stocks closed higher Tuesday ahead of the vote, with the Nasdaq rebounding into positive territory for the year.

The euro ran into profit-taking in Asia on Wednesday following the Greek confidence vote, but further losses may be limited as attention turns to Federal Reserve chairman Ben Bernanke’s news conference on Wednesday at 7:15 pm London time.

The single currency briefly pushed up to $1.4432 on news of the vote win, but then retreated to $1.4362.

Corporate releases on Wednesday include HMV preliminary results and second quarter results for Swedish fashion retailer H and M.

Vallares shares will commence unconditional dealings on the London Stock Exchange on Wednesday. The company is raising capital as it seeks to acquire or establish a major company business or asset in the oil industry.

Market Overview

An inaugural meeting of G20 agriculture ministers will take place in Paris on Wednesday where they are expected to discuss food price volatility. French President Nicholas Sarkozy will address a dinner attended by World Trade Organization director general Pascal Lamy.

Also in Paris, OECD Secretary General Angel Gurria will hold a press conference on public finance and economic policy in major economies.

U.S. First Lady Michelle Obama will continue her official visit to South Africa on Wednesday, where she will deliver a keynote speech in Soweto.

President Obama will deliver a speech in Washington on the pace and scope of withdrawal of U.S. troops from Afghanistan, which is due to commence next month.

In the U.K. the result of a ballot among Virgin Atlantic pilots is expected to be announced following a dispute with the airline over pay and conditions.

If a strike is supported, it could go ahead in July.

Economic data out on Wednesday includes information on German foreign trade with Greece, which is expected at 7:00 London time and European Union industrial new orders data for April will be available at 10:00.

Related Tags