European stocks are expected to follow Asian stocks and commodities lower, as the political impasse in Greece deepened Europe's sovereign debt crisis. With European leaders getting ready to survive a Greek exit, investors now turn their focus to other weaker eurozone members like Spain and Italy, which remain at the forefront of the crisis due to rising bond yields.
Meanwhile, new French President Francois Hollande and German chancellor Angela Merkel downplayed differences over crisis remedies for Europe and stressed their desire to make joint effort to reinvigorate growth and resolve the EU's economic crisis.
In the forex market, the euro fell to a four-month low versus the U.S. dollar after IMF chief Christine Lagarde said that the spillover effects and the chain of consequences that could result from a Greek exit from the eurozone could be quite messy. The Japanese yen weakened after data showed Japanese core machinery orders fell for the first time in three months in March.
In domestic corporate news, banks could be in focus after European Union finance ministers said they reached an agreement over stricter new banking rules in a bid to avoid future crises and relieve taxpayers from the need to bailout banks.
German aviation group Deutsche Lufthansa AG is interested in buying state-owned Portugese carrier Transportes Aereos Portugueses as part of its efforts to tap into the fast growing Latin American market, the Financial Times reported.
MBB Industries AG reported that consolidated earnings improved by 135 percent to EUR3.2 million in the first quarter of 2012 from EUR 1.4 million a year ago.
European Aeronautic Defence and Space Co., the parent of commercial aircraft maker Airbus, posted first-quarter net income of 133 million euros or 0.16 euros per share, as against a loss of 12 million euros or 0.01 euros per share last year.
European shares erased early gains to end at their lowest level since the start of 2012 on Tuesday, as the announcement in the afternoon that Greece will now have to endure a new round of elections and mixed eurozone data rattled investors.
The Euro Stoxx 50 index of eurozone bluechip stocks fell 1.1 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, shed 0.6 percent, while around Europe, Switzerland's SMI, the U.K.'s FTSE 100, France's CAC 40 and the DAX of Germany ended down between 0.2 percent and 0.8 percent.
U.S. stocks fell for a third consecutive session overnight, with the major averages ending at their worst closing levels in over three months, as news that Greece is heading for a fresh general election dented sentiment, overshadowing a batch of relatively upbeat economic data on home-builder confidence and activity in the New York manufacturing sector. Consumer prices were flat in April and retail sales barely grew, in line with estimates. The Dow shed half a percent, the tech-heavy Nasdaq slid 0.3 percent and the S&P 500 dropped 0.6 percent.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.