Europe Economy

Europe Stocks Seen Higher, Berlusconi Faces Vote

European stocks were called to open higher on Tuesday, tracking gains in Asia and on Wall Street, but investor concerns persist over rising Italian bond yields and doubts over who will replace Greek Prime Minister George Papandreou.

Share Price chart
Adam Gault | OJO Images | Getty Images

The FTSE is called 33 points higher, the DAX in Frankfurt is expected to open up by 62 points and the CAC 40 is called higher by 23 points.

All eyes will be on Italy on Tuesday as Prime Minister Silvio Berlusconi attempts to gain the support of his party deputies in a parliamentary vote on the nation's finances.

Berlusconi has come under increasing pressure to resign in recent days, but he has resisted calls to step aside, telling journalists on Monday that he will remain in his post.

Should Berlusconi lose the vote, he could be forced to resign or ordered by Italian President Giorgio Napolitano to call a confidence vote.

Markets responded negatively on Monday to Berlusconi's assertions that he will stay on as Prime Minister, after a day of rumors suggesting his position had become untenable and he would announce his resignation imminently.

Italian government bond yields hit near 15-year highs on Monday amid uncertainty over plans to cut the nation's massive deficit and the position of Silvio Berlusconi.

Jean Claude Juncker, chairman of Eurogroup of finance ministers said the European Central Bank along with the European Commission and the IMF would continue to watch the progress of a promised package of reforms designed to tackle Italy's massive deficit.

Greece could resolve doubts over who will replace Prime Minister George Papandreou on Tuesday when he holds a cabinet meeting at 10:00 London time.

A statement late on Monday confirmed that the meeting would take place, with no further details on what would be discussed.

However, government spokesman Elias Mossialos said in a statement that talks between Papandreou and opposition leader Antonis Samaras had reached a "positive" outcome.

French bank Societe Generale posted a 30.6 percent drop in third quarter net profit on Tuesday, while revenue rose by 3.2 percent to 6.5 billion euros.  The lender also announced that it has scrapped its dividend for 2011 and the bank's exposure to PIIGS sovereign debt fell to 3.4 billion euros by the end of October.

Other corporate releases out of Europe on Tuesday include British retailer Marks and Spencer which is expected to report a fall in first half profit and its first fall in underlying quarterly sales for two years as British consumers remain under pressure due to inflation and raw material costs continue to rise.

German insurer Munich Re is set to release its third quarter data at 7.45, while Italian tire giant Pirelli also announces quarterly trade data on Tuesday.

From London, third quarter results from Lloyd's Banking Group could be overshadowed by concerns over the lender's management team after investors were told last week that CEO Antonio Horta-Osorio would take a period of leave due to ill health.

Finance director Tim Tookey has been named as an interim replacement, but Tookey is due to leave Lloyd's in February for an outside position.

British cell phone operator Vodafone will report at 7:00 London time.

Economic data from Europe includes German foreign trade figures for September at 7:00 UK time, followed by France at 7:45.

UK industrial production figures will be available from 9:30.

Related Tags