European Stocks Seen Higher, Eyes on Europe Rescue Deal

European stocks were called to open higher on Wednesday, tracking gains in US and Asian stocks but investor skepticism persisted over this weekend's summit of European leaders and their ability to reach definitive decisions on how to solve the region's sovereign debt crisis.

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

The FTSE is called 58 points lower, the DAX in Frankfurt is expected to open down by 81 points and the CAC 40 is predicted to be lower by 36 points.

A plethora of bad news out of Europe on Tuesday including a report showing German investor confidence at its lowest level for three years, the downgrade of 24 Italian banks by rating agency Standard and Poor's and a Moody's downgrade of Spain's sovereign rating was tempered slightly by better-than-expected US producer price data and some positive earnings news.

German Chancellor Angela Merkel said on Tuesday that the upcoming summit of European leaders will be an "important step" to resolving the crisis, but she warned the scale of the debt crisis means it will take "difficult, long term work" to resolve.

Asian stocks followed gains in Wall Street on Tuesday but a cut to Spain's credit rating by Moody's kept investors vigilant.

A report in British newspaper The Guardian that France and Germany have reached a deal to expand the European Financial Stability Facility to 2 trillion euros ($2.76 trillion) pushed the euro higher in overnight trade, before the common currency fell back on news of the Spanish downgrade.

Key corporate releases from Europe on Wednesday include first quarter results from British Sky Broadcasting .

The company reported revenues for its first quarter just ahead of expectations as strong sales of broadband to existing custimers made up for the expected slowdown in new subscriber additions.

Brewer SABMiller said beer volumes in the first half of its financial year were up 3 percent compared to the same period a year earlier. In Latin America, lager volumes grew 8 percent, the company said, while lager volumes in Europe were similar to those in the same period last year.

Greek public sector workers will stage a 24 hour strike against austerity measures on Wednesday and the Occupy London demonstration in the city's financial district enters its fifth day.

The Bank of England Monetary Policy Committee will publish minutes from this month's meeting when members voted to maintain interest rates at 0.5 percent and increase its quantitative easing program by £75 billion ($118 billion) to £275 billion ($433 billion).

A farewell ceremony for outgoing European Central Bank President Jean Claude Trichet will take place in Frankfurt on Wednesday, with German Chancellor Angela Merkel, European Commission head Jose Manuel Barroso and President of the European Council Herman van Rompuy expected to attend. The ceremony will get underway at 3pm London time.