Europe Stocks Seen Flat Ahead of Debt Summit

European shares are expected to open flat Thursday as investors remain cautious over the possibility that a resolution to the European sovereign debt crisis can be reached.

Close-up of a pen on stock price chart
Close-up of a pen on stock price chart

The FTSE is called lower by 5 points, the DAX is expected higher by 6 points and the CAC-40 is expected higher by just 2 points.

The euro climbed for a third day in a row in Asian trade as Germany's Chancellor Angela Merkel and France's President Nicolas Sarkozy struck an agreement at the 11th hour at their pre-summit meeting in Berlin Wednesday, raising hopes that Thursday's summit will yield a solid plan to resolve the euro area debt crisis.

The French delegation said the agreement included a contribution by European banks to the second Greek bailout.

The UK's chancellor George Osborne told the Financial Times in an interview that the euro zone leaders needed to "get a grip" on the sovereign debt crisis at today's summit.

In the US hopes are high that talks between Republicans and Democrats aimed at preventing a US technical default on August 2 will succeed as President Obama signalled that he would be willing to support a short-term increase in borrowing for 'a few days' if lawmakers agreed to a broad deficit reduction deal.

Corporate earnings results for the second quarter will see the UK's Kingfisher, Finland's Nokia, Sweden's Ericsson all reporting Thursday.

In the US among those reporting earnings results will be AT&T , PepsiCo , Blackstone , Landstar System and after the bell AMD and Chubb Group .