European markets likely to open lower on weak global signals

European markets likely to open lower on weak global signals
Published: 23 September 2008

Most major European markets area likely to extend their losses Tuesday, tracking Wall Street’s plunge overnight amid uncertainties related to the US$700bn bailout plan for failing financial firms. The major Asian markets have turned mixed after a weak start on Tuesday. Additionally, the major European index futures are showing weakness (reports Real time Traders).

Economic reports scheduled for release in Europe include the French consumer spending, the Italian consumer confidence index, and the French, German and Euro-Zone purchasing manager indexes for the manufacturing and services sectors. In the U.S., traders await the release of reports on the house price index, the Richmond Fed manufacturing index, and ABC consumer confidence. Additionally, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson will testify before the Senate Banking Committee along with FHFA Director James Lockhart and SEC Chairman Christopher Cox on credit market turmoil.

The European markets fell Monday on doubts surrounding the U.S. government’s proposed rescue plan for the financial sector. A sharp rise in crude oil prices also weighed on the markets. The U.K.’s FTSE 100 index dropped 1.4% to 5,236 and France’s CAC 40 index declined 2.3% to 4,223, while Germany’s DAX index lost 1.3% to 6,107.

Groupe Bruxelles Lambert and Lafarge are likely to move after a regulatory filing showed that the Belgian investment firm controlled by billionaires Albert Frere and Paul Desmarais raised its stake in the cement maker to 20.45% from 20.04% and held 25.6% of the Lafarge’s voting rights as of September 14.