European shares are set for a slightly lower open on Wednesday, failing to gain traction from a modest rally in the U.S. where the Dow Jones Industrial Average closed above 18,000 points for the first time ever.

The FTSE is called to open lower by 1 point at 6,597, the German Dax is seen down by 16 points at 9,906 and the French CAC is seen lower by 3 points at 4,312.

Trading volumes are set to be light in Europe on Wednesday with markets open for just a half day due to the festive holidays. The U.K.'s FTSE 100 is set to close at 12.30 p.m. London time with the major European bourses ending at 1.00 p.m. London time. Indexes in Italy and Germany are both closed throughout the day.

Yesterday a fall in Greek stocks kept a lid on gains in European equities, as Greece is faced with the prospect of early elections that could put the controversial rescue package at risk. Meanwhile the broader European equity market was aided by positive economic news from Spain and Portugal. The Bank of Spain raised its economic forecast while Portugal's budget deficit shrank.


Asian indices largely rose today, with the exception of China, driven by the strong U.S. growth report. However, volumes remained low, with markets in Australia, Hong Kong and Singapore only open for half day ahead of tomorrow's holiday.

The Nikkei 225 share index reached a two-week high of 17,854 points yesterday, after being shut for a public holiday in the previous session, as dollar-yen broke through the 120 mark.

That pushed exporters' stocks higher, with Honda and Toyota Motor advancing 2.1 and 1.6 percent each. Sony, which announced Tuesday it will allow the movie "The Interview" to open in selected theatres on Christmas Day, charged 4 percent higher. China's Shanghai Composite index lost 1.9 percent to hit a two-week low today, adding to a 3 percent plunge in the previous session.


U.S. stocks rose yesterday, with the Dow closing above 18,000 for the first time ever and the S&P 500 ending at a record after an unexpectedly strong report on economic growth. Markets are expected to proceed with yesterdays’ momentum and open higher later today.

The final estimate for third-quarter U.S. economic growth was revised up to a 5 percent annual pace, topping expectations for growth of 4.3 percent.

Yesterdays’ selloff in biotech related companies, caused the Nasdaq to end 0.33% lower while trading was light ahead of the Christmas holiday. Markets in the US will also close early today and will be closed all day on Christmas Day. The Dow Jones industrial average rose 0.36 percent, to 18,024.11, the S&P 500 gained 0.18 percent.


Standard & Poors is considering downgrading Russia’s credit rating to non-investment grade as the country is faced with the worst economic crisis since the 1998 debt default. Such a move could come into effect within the first quarter of 2015.

Sanctions together with the fall in oil prices have scared the country and pushed the economy on the verge of a recession. One-fifth of the country’s international reserves have been pumped into the economy and benchmark interest rates have been increased six times since the invasion of Crimea.

The central bank has been forced to put National Bank Trust, the country’s 15th-biggest lender based on retail deposits, under its control yesterday, effectively marking the first bailout since the currency crisis started, as the Russian authorities try to avert a banking crisis.

As the Central bank tries to reduce capital outflow the key rate was raised to 17 percent from 10.5 the biggest increase since 1998. Notwithstanding such measures the economy is expected to shrink as much as 4.7 percent next year, the most since 2009, if oil averages $60 a barrel according to the Russian central bank. Net capital outflows may more than double this year to $134 billion.


As future demand for oil is expected to rise following the release of positive economic data from the US, oil prices per barrel rose by more than $2. The rally marks a second consecutive increase in price, after data showing the fastest rate of U.S. economic growth in 11 years bolstered expectations for crude demand.