Europe shares set to fall on Greek bailout doubts

PARIS (BestGrowthStock) – European stocks are set to fall on Monday, hurt by worries that a 110 billion euros ($146 billion) bailout of Greece will face political hurdles, while trading will be muted as UK markets are closed for a public holiday.

Investors were also rattled by China’s move on Sunday to raise the proportion of deposits that lenders must keep in reserve at the central bank, another step in the country’s campaign to remove excess cash in the economy.

By 2:32 a.m. ET, futures for the STOXX Europe 50, for Germany’s DAX and for France’s CAC were down 0.2-0.6 percent.

European nations aim to formally launch the largest ever financial rescue of a country this week, hoping to ease fears that Greece’s bailout could be the first of similar moves to shore up other economies in the euro zone.

Early on Monday, the European Central Bank said it had suspended the application of a minimum credit rating threshold on Greek sovereign debt, a move that means Greek debt will remain eligible as collateral in ECB lending operations even if rating agencies continue to downgrade Greece’s debt.

The euro sank nearly 1 percent on Monday and Asian stocks retreated on concerns over the aid package for Greece as well as on China’s latest step to cool its economy.

“In Asia, regional markets have started the week mostly lower as a myriad of factors weigh on global markets (including) China’s decision yesterday to further hike banks reserve ratios and concerns over Goldman Sachs,” IG Markets analyst Ben Potter wrote in a note.

U.S. stocks (Read more about the stock market today. ) sank on Friday, posting their worst week since January as news of a criminal probe into Goldman Sachs (GS.N: ) unnerved investors already anxious about the prospects for heavy regulation from Washington. (.N: )

European mining shares will be under pressure after the Australian government announced a new 40 percent tax on resource firms, sending shares of Rio Tinto (RIO.AX: ) and BHP Billiton (BHP.AX: ) traded in Australia tumbling around 5 percent.

The FTSEurofirst 300 (.FTEU3: ) index of top European shares fell 2.7 percent last week, recording its third straight week of declines, hammered by mounting fears over sovereign debt in the euro zone.

Japanese markets were also closed on Monday for a public holiday.

Stock Market Today

(Reporting by Blaise Robinson)

Europe shares set to fall on Greek bailout doubts