European shares were set for a lower opening on Friday, after overnight weakness in U.S. stocks and as a light corporate agenda leaves investors focusing on economic worries, a weakening of the dollar, and concerns over escalating tensions in the Middle East.
U.S. President George W. Bush demanded late on Thursday that Syria pull troops from Lebanon in the wake of the killing of former Lebanese Prime Minister Rafik al-Hariri and said he would seek support from European leaders next week to put more pressure on Damascus.
Bush also said there was still time to use diplomacy to keep Iran from developing a nuclear weapon and vowed to support Israel if Tehran threatened its security.
Signs that the Chinese economy may be slowing will weigh on sentiment and hit sectors such as basic producers and car makers. Data showed China's industrial output had surged 20.9 percent in the year through January, but growth was less than half that after adjustments for the Chinese New Year holiday.
Investors will scour a batch of economic data from both sides of the Atlantic for fresh clues on the strength of the global economy, with the publication of the University of Michigan consumer sentiment survey taking the limelight in the afternoon.
Interest rate concerns may also linger after Norway's central bank said it could gradually raise interest rates from historic lows because economic growth looked increasingly self-sustaining and stubbornly low inflation has begun to pick up.
Here's how the day looks:
*MARKETS
* Spread betters in London are calling the FTSE 100 , CAC-40 , and DAX indexes between 10 and 11 points lower.
* The FTSEurofirst 300 index of leading European shares closed only 0.1 percent up on Thursday, despite a solid batch of earnings from blue chips like L'Oreal and Reed Elsevier, amid renewed worries over future economic and monetary conditions.
* U.S. stocks ended lower, weighed by concerns about rising interest rates and increased worries about turmoil in the Middle East.
* Oil prices drifted higher early on Friday, reclaiming some of the previous day's slide after the market absorbed news of a hefty stock build the United States.
* The euro spiked near a two-week high against the dollar. The dollar's inability to sustain gains after a surprisingly strong reading in the Philadelphia Federal Reserve Bank's index of mid-Atlantic business activity sparked concern that the currency headed for more losses.
* In Tokyo, the Nikkei average hit a 7-1/2-month closing high, helped by technology stocks.
* Other Asian indexes like the Kospi , Hang Seng and Straits Times were steady.
* Gold inched down in Asia, pressured by light corrective sales ahead of a long weekend in the United States, but underlying sentiment stayed bullish due to the dollar's weakness against the euro. ()