Europe Economy

FTSE, CAC, DAX Seen Lower on Euro Zone Pessimism

European stocks were signaled to open sharply lower on Wednesday as worries about the euro zone debt crisis lingered in the markets despite a denial by Greece's foreign minister that his country will default.

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The FTSE was indicated to open 27 points lower at the open, the DAX was set to lose 44 points, and the CAC was expected to open 21 points down.

Greece's Foreign Minister Stavros Lambrinidis said his country will "absolutely" stay in the euro and will not default.

"For the past year and a half I've been waking up every morning to reports of my imminent death: default of the country," Lambrinidis told CNBC in an interview. "We're still here, and Europe is still here— and the euro is still a very strong currency."

The European Commission said late on Tuesday that Greece has made good progress in talks with international lenders.

On the economic front, closely-watched public sector finances data for the UK for August will be released at 7:30 am London time; at the same, the minutes from the Bank of England Monetary Policy Committee's meeting at the beginning of September will be published as well.

Minutes from the August meeting showed that all nine members of the MPC voted to maintain the key interest rate at the historic low of 0.5 percent; two members voted for an interest rate increase in a previous meeting.

Markets will be watching the second day of the US Federal Reserve monetary policy meeting, with expectations that the Fed will unveil a program to buy longer-dated Treasurys in order to keep interest rates down.

In the banking sector, Italian bank Mediobanca will release results at 10:30 am London time and is expected to post a loss for its fourth quarter on exposure to Greece. Investors will be watching the bank's outlook for next year.

The biggest shareholder of UBS, the Government of Singapore Investment Corporation (GIC) criticized "lapses" of the bank's control systems that led to the rogue trader scandal, at a meeting in Singapore, the FT reported.

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