European stocks are seen opening largely unchanged with a positive bias on Tuesday, although concerns persist about the outcome of the upcoming European summit later this week. German Chancellor Angela Merkel rebutted the idea of common debt issuance and dismissed proposals such as European deposit insurance with joint liability, dashing hopes of new measures to fight Europe's escalating debt crisis.
Also rattling investor confidence, Moody's Investors Service downgraded the long-term debt and deposit ratings for 28 of the 33 rated Spanish banks and two issuer ratings, reflecting the reduced creditworthiness of the Spanish sovereign and the expectation that the banks' exposures to commercial real estate would likely cause higher losses.
Meanwhile, European leaders may consider giving the European Union more powers to rewrite the budgets of euro-zone countries, who breach the debt and deficit pact, at this week's summit, the Financial Times reported. The proposals are part of a wide-range of measures aimed at building a closer fiscal union, the report said citing the draft report to be presented at the summit.
Asian markets are trading modestly lower on concerns the European debt crisis is worsening. China's Shanghai Composite index is little changed after HSBC Holdings Plc joined Citigroup in cutting the nation's growth forecast. The euro is holding steady against the dollar in Asian deals despite a slew of Spanish bank downgrades and Cyprus' request for a bailout.
Cyprus has formally requested financial assistance from the euro area's bailout funds to shore up its banks struggling from exposure to debt-ridden Greece, the government of eurozone's third-smallest economy said in a statement.
In economic releases, confidence among German consumers is likely to rise in July, a survey by market research group GfK showed . The consumer confidence index for July rose to 5.8 from 5.7 in June. Economists expected the score to fall to 5.6 in July.
Spain's short-term debt auction results are due later in the session, with the government aiming to issue between EUR 2 billion and EUR 3 billion via 3-month and 6-month T-bills.
In corporate news, TAG Immobilien AG, Hamburg, announced the successful execution and pricing of its EUR 85.3 million seven-year convertible bond offering to institutional investors.
Belgian brewer Anheuser-Busch InBev NV/SA confirmed media speculation that it is in talks to buy the remainder of Mexican brewer Grupo Modelo S.A.B. de C.V., owner of the Corona Extra beer.
Swiss banking giant Credit Suisse Group plans to slash about one-third of senior jobs at its European investment banking department, with the layoffs expected to continue over several months beginning July, reports suggest.
Human resources firm Adecco's board has decided to launch a share buyback program of up to 400 million euros on a second trading line, with the aim of subsequent cancellation of the shares and reduction of the share capital.
Verizon Wireless, a joint venture of Verizon Communications and Vodafone, announced an agreement with T-Mobile USA to exchange specific spectrum in the Advanced Wireless Services band.
Europe's organic food producer Wessanen has begun the divestment process of its U.S. subsidiary American Beverage Corp. in line with the company's strategy to focus on organic food in Europe and make its organic brands most desired in Europe.
European stocks were hammered on Monday after Spain formally requested $77 billion in aid from its European Union neighbors. The Euro Stoxx 50 index of blue chip stocks tumbled 2.6 percent and the Stoxx Europe50 index slid 1.3 percent, while around Europe, Switzerland's SMI, the U.K.'s FTSE 100, France CAC 40 and the German DAX fell between 0.8 percent and 2.2 percent.
U.S. stocks declined sharply overnight on pessimism the upcoming EU summit will unlikely deliver concrete steps to tame the debt crisis. News reports of continued differences among EU leaders over growth and fiscal discipline, a move by Fitch ratings to downgrade Cyprus' sovereign credit grade to junk status and the resignation of Greece's new finance minister because of ill health added to concerns about weaker global growth, overshadowing positive U.S. new-home-sales data . The Dow ended down 1.1 percent, the tech-heavy Nasdaq tumbled about 2 percent and the S&P 500 lost 1.6 percent.
by RTT Staff Writer
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