European stocks may fall on debt worries Wednesday as ratings agency Standard & Poor's lowered its outlook on Greece's long-term credit rating to 'negative' from 'stable', increasing the pressure on Greece's political leaders to enact debt reforms.
The agency said delays in bringing about budget consolidation and a deteriorating Greek economy mean the country is likely to require additional bailout funding from the European Union and the International Monetary fund. With Greece's GDP expected to contract by 10 to 11 percent for the two year period ending in 2013, the report predicted the country would require up to 7 billion euros in additional financing.
Asian stocks are trading on a mixed note, paring early gains, after the S&P announcement. Commodities are edging lower and the euro turned weaker following recent gains.
On the macroeconomic front, employment in the British private sector declined further in July, though at a slower rate, data from the survey by the Recruitment and Employment Confederation and KPMG showed. Data from the survey showed that there were further reductions in both permanent and short-term staff appointments in private sector firms in July, but the rates of decrease were weaker than those in the previous month.
Investors also await industrial production and foreign trade data from Germany and the Bank of England's quarterly inflation report for further clues on central bank action to bolster economic growth.
Elsewhere, China is due to release a slew of data including inflation, industrial production, retail sales and inflation tomorrow, while the Bank of Japan started its two-day policy meeting today.
The Bank of Korea will also hold its policy meeting tomorrow and many analysts expect the central bank to leave its benchmark seven-day repo rate steady at 3 percent after its surprise rate cut last month.
In domestic corporate news, German premium carmaker Bayerische Motoren Werke AG reported a five percent increase in July sales, reflecting strong gains in Asia.
Biotest AG confirmed its guidance for sales and profit in 2012 despite the U.S. FDA delaying marketing approval of its newly developed polyspecific immunoglobulin preparation.
Chemical distributor Brenntag AG reported higher profit for its second quarter as sales climbed despite more difficult market conditions.
Corio NV reported first-half total result attributable to shareholders of 12.3 million euros or 0.13 euro per share compared to 128.8 million euro or 1.41 euro per share last year.
Printing machines maker Heidelberger Druckmaschinen Aktiengesellschaft reported a wider first-quarter net loss of 74 million euros compared with a loss of 46 million euros in the previous year.
European stocks finished in positive territory on Tuesday despite some weaker than expected economic data and a sharp drop in shares of Standard Chartered Plc. after the New York State Department of Financial Services accused its unit of hiding $250 billion in illegal dealings with Iran for more than a decade.
The Euro Stoxx 50 index of eurozone bluechip stocks rose 1.7 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.7 percent, while around Europe, the U.K.'s FTSE 100, France's CAC 40 and the German DAX rose between 0.6 percent and 1.5 percent.
U.S. stocks rose for a third straight session to hit fresh three-month closing highs overnight, as data showing a fourth consecutive quarter of contraction in Italy's economy and declining German factory orders stoked expectations that the ECB will unveil additional measures to address the ongoing debt crisis.
Buying interest was also generated by comments by Boston Federal Reserve President Eric Rosengren, who called for an "open-ended" quantitative easing program to boost economic growth. The Dow rose 0.4 percent, the tech-heavy Nasdaq gained 0.9 percent and the S&P 500 advanced half a percent.
by RTT Staff Writer
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