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Morning Brief

European shares are called to open lower this morning. In Spain, the banking sector worries continue as the economy in Spain stalls. Banks need capitalisation and also need to clean their balance sheets from non-performing loans due to a recession in the country. Also, Spain’s borrowing cost is hovering around the 7%.

Meanwhile, in Greece opinion polls are indicating that pro bailout parties will win the 17th June Election. However, one must comment that this opinion poll is too close to predict a decisive winner.

Asian stocks dropped as China damped speculation of large-scale stimulus in the world’s second-largest economy. China has no plans to introduce stimulus measures of the scale seen during the global financial crisis, the official Xinhua News Agency said yesterday. The economy is forecast to expand 8.2 percent this year, the slowest since 1999.

Earlier, in the US, markets edged higher on the hopes of the same stimulus by China. The US consumer confidence came weaker than expected and home prices continued to decline.