Preview: Negative Momentum to Push European Stocks Lower

European equity markets looked set to extend losses next week as stocks teetered at inflated price levels with little on the corporate and economic calendar to act as a positive catalyst.

"I think we should have a little bit more downside next week," Frederic Oubel, salesman for European equities at Global Equities, told "The last consolidation was not sound enough, we rebounded too quickly."

Oubel added that a lack of positive corporate and economic news next week would leave markets to fall on their current negative bias.

Mergers and acquisitions will remain in focus next week as ongoing battles for Dow Jones and Borsa Italiana look set to continue.

NYSEEuronext put in a rival preliminary bid for Borsa Italiana Friday, matching an initial offer from the London Stock Exchange Thursday of $2 billion, the Wall Street Journal reported citing people familiar with the matter.

And Rupert Murdoch's News Corp. closed in on Dow Jones, when General Electric and Pearson decided not to pursue a joint offer for the news provider.

On the political front, Gordon Brown will be unveiled as new leader of the U.K.'s incumbent Labour Party Monday. He will move into number 10 Downing Street on Wednesday, when Tony Blair officially steps down from the post of prime minister.

Next week also sees interest rate decisions from Hungary, Norway and Poland. Following last week's unexpected hike from Sweden, investors will be wary of further surprises from the European central banks.

And proposed consolidation between France's major energy companies Suez and Gas de France will be put to a shareholder vote at GdF's extraordinary shareholder Monday.

The vote comes one week before France opens up its energy market and ends a 60-year monopoly for the two national giants.

Other highlights next week include a two-day investor conference in La Baule, France on Thursday and Friday, where investment in green technologies will be top of the agenda.

CNBC Europe will be reporting live from this event and the annual Wimbledon tennis championship in London, which begins on Monday and lasts for two weeks.