Europe Stocks Seen Edging Down; Eyes on US Debt

European stocks were indicated to open slightly lower on Wednesday as investors kept a close eye on attempts to get agreement on the US debt ceiling and ahead of a raft of corporate earnings.

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The FTSE [.FTSE 5907.32 -22.41 (-0.38%) ] was seen falling 10 points at the open, the DAX [.GDAXI 7297.84 -51.61 (-0.7%) ] was predicted to open down 19 points and the CAC [CAC40 3752.16 -35.72 (-0.94%) ] was expected to lose six points.

Following losses on Tuesday, the dollar [EUR= 1.4467 -0.0046 (-0.32%) ] stabilized overnight as US House Speaker John Beohner attempted to find new spending cuts that would enable his debt plan to be voted on.

Aides to the White House say the plan is likely to be vetoed as the administration strongly opposes it in its current form.

US money market funds are stockpiling cash in case no agreement is reached, the FT reported.

The news comes after the Bank of International Settlements said that global banks considerably reduced their exposure to rivals in the euro zone and UK in the first quarter of 2011 amid fears over the euro zone debt crisis.

It will be a very busy day for earnings across Europe, with heavyweights like Arcelor-Mittal, Daimler and BAT all due to report.

German software giant SAP [SAPG.DE 44.10 0.61 (+1.4%) ] has raised its outlook despite fears over the strength of the euro zone economy.

Like rival IBM, SAP believes visibility for the industry has improved. Shares are expected to gain in Frankfurt at the open following gains in late Wall Street trade.