Europe to Open Up Despite Portugal Woes

European stocks look set to open slightly higher on Thursday despite the resignation of Portugal's prime minister.


Portuguese Prime Minister Jose Socrates resigned on Wednesday after the country's parliament rejected his government's latest austerity measures.

The euro fell on the news, as investors worried that heavily-indebted Portugal may be the next country to require a bailout. But the euro zone currency continued to trade above the $1.40 level against the dollar ahead of an European Union summit in Brussels.

According to BGC Partners, the UK's FTSE 100 index would gain 7 points at the open to 5,803, while Germany's DAX index may rise 11 points to 6,815, and France's CAC index will increase 3 points to 3,916.

Asian shares were mostly higher on Thursday, with the exception of Japan's Nikkei index. Workers at the Fukushima nuclear plant are still struggling to calm overheating reactors as radiation leaks into tap water and countries impose curbs on imports of Japanese foods.

European shares gained on Wednesday, with the pan-European FTSEurofirst index closing 0.3 percent higher at 1,111.00 points.

EU heads of state meet for the first of two days of talks in Brussels Thursday. Leaders are likely to delay a decision on how to strengthen their multi-billion euro rescue fund beyond the summit this week, undermining market confidence and possibly prolonging the region's debt crisis.

For months, EU leaders have talked about using the summit, to reach a final agreement on a "comprehensive package" of measures that would prevent the crisis from spreading further.

But draft conclusions prepared by euro zone officials for the summit, seen by Reuters on Wednesday, make clear that definitive decisions on the fund, the European Financial Stability Facility, will now only be taken by the end of June.

Oil prices will remain in focus amid heightened geopolitical concerns. Japan's nuclear crisis continues unnerve investors, while mounting pressure in Yemen for the country's President to step down added to uncertainty in the Middle East.

UK February retail figures are released Thursday morning, as well as the euro zone's flash purchasing managers' index (PMI) for March. The latter will provide an indication of growth rates in the euro zone's services and manufacturing sectors.