European stocks may open modestly higher after the previous session's steep sell-off even as debt concerns persist.
Twelve European Union countries, out of which seven are in the euro zone, suffer from macroeconomic imbalances that need to be corrected, the European Commission said in a report. "Spain and Cyprus are facing very serious imbalances, not least in their financial sectors, which need to be addressed as a matter of urgency," the EU economics chief said after presenting the report.
Meanwhile, a new opinion poll showed that Greece's radical leftist Syriza party has taken the lead over the pro-bailout conservatives, rekindling concerns pertaining to a Greek euro exit.
Major Asian markets are trading lower across the board, although they have come off their early lows. Industrial output in Japan added a seasonally adjusted 0.2 percent from the previous month in April, the Ministry of Economy, Trade and Industry said in a preliminary reading - expanding for the second straight month.
However, the headline figure was shy of forecasts for an increase of 0.5 percent following the 1.3 percent increase in March. On an annual basis, output climbed 13.4 percent - also missing expectations for an increase of 13.7 percent following the 14.2 percent increase in the previous month.
Commodities pared early losses, while the euro is hovering near a two-year low against the dollar.
In economic releases, consumer confidence in the United Kingdom improved slightly in May, but remained negative overall, a survey by GfK NOP showed. The research group's confidence index improved two points to minus-29 from the April reading of minus-31.
Separately, the Swiss economy expanded 0.7 percent quarter-over-quarter in the first three months of of 2012, data released by the State Secretariat For Economic Affairs showed. The outcome was much better than the economists' forecast for a zero growth and compares favorably with the 0.5 percent economic growth in the fourth quarter.
In corporate news, Swiss Re announced the sale of its U.S. Admin Re business to Jackson National Life Insurance in an attempt to unlock capital for re-deployment across the Swiss Re Group.
Fimalac announced its first-half of 2012 consolidated results, with profit attributable to equity holders of the parent rising to EUR104.5 million from EUR23.1 million in the year-ago period.
The European markets fell sharply across the board on Wednesday, as concerns surrounding Spain's banks and the upcoming Greek election coupled with news that China may not match the stimulus efforts of 2008, with a much lower spending this time around rattled investors.
The Euro Stoxx 50 index of eurozone bluechip stocks tumbled 2 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.4 percent, while around Europe, the U.K.'s FTSE 100, the German DAX and France's CAC 40 fell between 1.7 percent and 2.2 percent. The SMI of Switzerland posted a modest 0.2 percent loss, with a rise in defensive heavyweights such as Nestle and Novartis helping limit the downside.
U.S. stocks tumbled overnight as surging bond yields in Spain and Italy raised the risks of contagion spreading to other economies. Adding to jitters, a report from the National Association of Realtors showed that U.S. pending home sales unexpectedly saw a notable decrease in April, with the headline index tumbling 5.5 percent to 95.5 in April after rising 3.8 percent in March.
The drop by the index surprised economists, who had expected pending home sales to edge up by 0.5 percent. The Dow slid 1.3 percent, the tech-heavy Nasdaq fell 1.2 percent and the S&P 500 lost 1.4 percent.
by RTT Staff Writer
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