LONDON, April 11 European shares were set to fall further on Wednesday after hitting 12-week lows in the previous session, with a sharp rise in Spanish and Italian bond yields and worries over global growth prompting investors to move out of riskier assets.
Futures for Euro STOXX 50, Germany's DAX and France's CAC were down 0.4 to 0.6 percent. Financial spreadbetters earlier predicted Britain's FTSE 100 to open as much as 0.4 percent lower.
"Amid fears that Europe's sovereign debt crisis is taking another turn for the worse, and (with the market) facing the prospects of a U.S. earnings season bereft of any meaningful EPS growth, debate has intensified (about whether) global equities are set for a period of medium-term weakness," Cameron Peacock, analyst at IG Markets, said in a note.
"Unfortunately, the negative sentiment looks set to continue beyond a couple of days."
Focus has shifted back to the euro zone's sovereign debt crisis, with Spanish bond yields rising to within a whisker of six percent. The euro zone's struggling "peripheral" economies are already battling with dwindling growth in the face of harsh budget cutbacks.
Japan's Nikkei fell 0.8 percent on Wednesday, while the FTSEurofirst 300 index of top European shares finished 2.5 percent down on Tuesday at 1,026.15 points, the lowest close since mid-January. It has fallen 7.5 percent since hitting an eight-month high in March and is up just 2.5 percent this year. U.S. shares ended 1.7 to 1.8 percent lower.
The equity market's technical picture has deteriorated, with the euro zone's blue-chip Euro STOXX 50 index falling 3 percent to 2,321.53 points to close below its 200-day moving average in the previous session. A fall below its January low of 2,307 could open the door for more weakness, charts showed.
Investors will keep a close eye on the earnings season, which is expected to be mixed. Japan's Sony Corp flagged a record $6.4 billion annual net loss, double an earlier forecast and a fourth straight year of red ink.
However, U.S. company Alcoa surprised Wall Street on Tuesday with a first-quarter profit after a loss in the fourth quarter of 2011. The company, which makes aluminum for aircraft, cars and beverage cans, raised its 2012 global growth forecast for the aerospace market by 3 percentage points to 13-14 percent.
On the macroeconomic front, focus will be on March U.S. import and export prices, due at 1230 GMT. March's Federal Budget and the latest Federal Reserve Beige Book both will be published at 1800 GMT.
MARKET SNAPSHOT AT 0630 GMT
LAST PCT CHG NET CHG
S&P 500 1,358.59 -1.71 % -23.61
NIKKEI 9,458.74 -0.83 % -79.28
MSCI ASIA EX-JP <.MIASJ0000PUS -0.69 % -3.53
EUR/USD 1.3104 0.18 % 0.0023
USD/JPY 80.92 0.27 % 0.2200
10-YR US TSY YLD 2.003 -- 0.02
10-YR BUND YLD 1.663 -- 0.00
SPOT GOLD $1,656.60 -0.2 % -$3.25
US CRUDE $101.27 0.25 % 0.26
* Shares fall on growth, euro zone debt worries
* Nikkei likely to mark 7th day of losses, Sony falls
* Yen buoyed near multi-week high as risk aversion climbs
* Brent steady at $120; demand growth worries weigh
* Gold edges down after 4-day winning run
* LME copper edges up after sell-off, Shanghai down
* Dow, S&P fall for fifth day, but Alcoa up late
* Global growth worries push yields to 4-week lows
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