European stocks are poised for a mixed start, with investors likely to turn their focus to Germany after Moody's Investors Service downgraded its rating outlook on Germany, the Netherlands and Luxembourg to 'negative' from 'stable' due to intensified uncertainty regarding the outcome of the debt crisis.
These sovereigns are impacted by the "rising uncertainty regarding the outcome of the euro area debt crisis and the increased susceptibility to event risk stemming from the likelihood of Greek exit, including the broader impact that such an event would have on euro area members, particularly Spain and Italy," Moody's said.
The euro remains on the defensive ahead of Greece's meeting with international creditors in Athens today to assess the country's progress in meeting official bailout targets. Speculation is rife that the country will not be able to meet its deficit targets and the troika may refuse further financial aid.
Asian markets are turning in a mixed performance, recovering some early losses, after an initial gauge of manufacturing activity showed China's manufacturing activity contracted at its slowest pace in five months in July. The flash manufacturing purchasing managers' index for July rose to 49.5 from 48.2 in June
Closer home, consumer confidence in the eurozone deteriorated in July amid a further escalation of the debt crisis, the latest figures from the European Commission showed. The flash estimate of the consumer confidence indicator for the euro area decreased sharply to -21.6 in July from -19.8 in June. Meanwhile, the indicator for the EU fell to -20.3 in July from -19.7 in the previous month.
In corporate news, STMicroelectronics N.V., Europe's biggest chipmaker, reported a loss for the second quarter on lower revenues and margins.
German business infrastructure software firm Software AG reported second-quarter net income of 37.5 million euros, down 3 percent from last year's 38.7 million euros.
Kontron AG posted second-quarter net income of 2.3 million euros, a decline from 7.7 million euros reported a year ago, and said it will prospectively fail to attain its full year 2012 targets due to current imponderables relating to the world economy and continued prevailing uncertainties on many target markets.
Business software giant SAP AG reported a higher profit for its second quarter boosted by strong software revenue growth in all regions.
Ams AG, a worldwide designer and manufacturer of high performance analog ICs for various applications, posted second-quarter net result of EUR 19.7 million compared to EUR 6.6 million in the same period last year.
Estavis AG, a property company focusing on residential properties, said that it has decided to buy back up to 500,000 units of its own stock.
Sunways AG said it slipped to a loss for the fiscal year 2011, as a shift in demand in target markets as well as price declines for components of photovoltaic systems led to a nearly 50 percent drop in sales.
AEG Power Solutions announced that it signed a major contract with Vienna-based Activ Solar. The deal covers photovoltaic utility scale equipment and services for a minimum of 170 MW until the end of 2013.
Norway-based telecommunication company Telenor ASA's second-quarter 2012 net income attributable to equity holders declined to NOK 2.07 billion from NOK 4.49 billion last year.
Dutch telecoms group KPN reported profit attributable to equity holders of 315 million euros or 0.23 euros per share for the second quarter versus 414 million euros or 0.28 euros per share last year.
Norsk Hydro AS posted second-quarter 2012 net loss of NOK 1.71 billion compared with a NOK 1.55 billion profit last year.
European stocks finished solidly in the red on Monday, with financial stocks bearing the brunt of the selling, after Spain and Italy reinstated a short- sale ban on stocks. Energy stocks and miners also fell sharply on concerns that Europe's debt crisis is worsening.
The Euro Stoxx 50 index of eurozone bluechip stocks fell 2.3 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, lost 2.1 percent, while around Europe, Switzerland's SMI, the U.K.'s FTSE 100, France's CAC 40 and the DAX of Germany fell between 1.7 percent and 3.2 percent.
U.S. stocks ended notably lower overnight, as signs that Spain could require a full bailout and the rising probability of a Greek exit from the euro zone spooked investors. The Dow slid 0.8 percent, the tech-heavy Nasdaq fell 1.2 percent and the S&P 500 dropped 0.9 percent.
by RTT Staff Writer
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