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FTSE, DAX, CAC to Open Sharply Lower

European stocks were expected to open lower on Tuesday after falling to their lowest close in a week on Monday with banking stocks among the biggest losers following an admission by Greece that it will miss its deficit targets for the year.

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The FTSE is called 100 points lower, while Germany's DAX is expected to open 114 lower and the CAC 40in France is predicted to be down by 61 points.

The STOXX Europe 600 Banking Index fell by 2.7 percent while Germany's DAX lost 2.28 percent, the CAC 40 1.85 percent and the FTSE 100 1.03 percent by Monday's close.

In Asia, stocks saw further losses on Tuesday as investors fled riskier assets amid renewed fears over a Greek default and the likelihood of a second planned EU/IMF bailout. South Korea's KOSPI was the hardest hit, plummeting 5 percent at the open prompting a suspension of program sales on the index by operator the Korea Exchange.

The yen reached a 10-year peak against the euro in Asian trading overnight, with the common currency falling below $1.3200 against the US dollar for the first time since January 13. The euro last stood at $1.3192, up from a session low of $1.3191.

The director of the IMF's Fiscal Affairs Department, Carlo Cottarelli warned on Monday that Italy might need to make its budget objectives more stringent if market pressure continues and concerns over sovereign debt are likely to remain high on the agenda of euro zone finance ministers who will conclude their meeting in Luxembourg today.

On Monday, finance ministers from the euro zone endorsed Joerg Asmussen as Juergen Stark's replacement on the executive board of the European Central Bank, sources said, but Asmussen will have to wait until October 17 to see if his candidacy is approved.

Following the conclusion of the meeting of euro zone finance chiefs, all eyes will be on Brussels where outgoing ECB head Jean Claude Trichet will take part in his last quarterly session before Members of the European Parliament before he leaves his post later this month. Trichet is expected to speak around 2pm London time.

In corporate news, Apple CEO Tim Cook will unveil the highly anticipated iPhone 5 from the company's California headquarters on Tuesday, while the European Union releases August PPI data at 10:00 London time.