Europe Economy

FTSE, DAX, CAC Seen Lower After Banks' Downgrade

European stocks were expected to open lower on Wednesday after Moody's downgraded Societe Generale and Credit Agricole's ratings on worries about their exposure to Greece.

Share Price chart
Adam Gault | OJO Images | Getty Images

The FTSE was expected to open lower by 32 points, the DAX lower by 28 points and the CAC-40 lower by 21 points.

BNP Paribas' rating review was extended by Moody's, while the bank announced it would sell 70 billion euros ($94.5 billion) in risk-weighed assets to allay investors' fears over the bank's leverage.

Investors will look to a conference call between Angela Merkel, Nicolas Sarkozy and Greek Prime Minister George Papandreou at 17:00 London time to discuss the continuing Greek crisis for clues on whether a solution is on the horizon.

On Tuesday, President Barack Obama voiced his concerns about the euro zone and called for leadership from its leaders, as German Chancellor Angela Merkel attempted to fight off talk over a possible Greek default.In a boost for Merkel’s attempts to shore up confidence, a Brazilian government official told Reuters that the BRICs (Brazil, Russia, India and China) are in preliminary talks over increasing their holdings in euro zone debt.

A decision on whether to do so could come at a meeting in Washington on September 22nd.

However, tensions remain and the head of the Bundesbank has stepped up the pressure on the European Central Bank over its controversial bond-buying program.

Bundesbank President Jens Weidmann said on Tuesday that buying so much Spanish and Italian debt created “considerable risks” for the ECB and again highlighted German opposition to the program following the resignation of Germany’s Juergen Stark from the ECB board.

In Dalian China at a meeting of the World Economic Forum, Chinese Premier Wen Jiabao has vowed to fight inflation while maintaining growth.

He added that China’s economic fundamentals remain strong despite the risks to the global economy.

Barclays' Chief Executive Bob Diamond has told a banking conference he is hosting in New York that the UK-listed bank remains on track to meet its targets despite the problems afflicting the euro zone, adding that the bank's liquidity and capital position are “rock solid.” In London, staff at Nomura will be nervous amid reports that 5 percent of its European staff could be let go on Wednesday.

CNBC’s Geoff Cutmore will be live from Dalian all morning on CNBC.