European stock index futures signalled early gains on Tuesday, as the European Central Bank's upcoming liquidity injection eclipses worries over Greece while recent fears that higher oil prices could derail the global economic recovery abated as the rally in crude loses steam.
At 0725 GMT, futures for Euro STOXX 50, for Germany's DAX and for France's CAC were up 0.2-0.4 percent.
Gains could be limited, however, as Greece's debt troubles remain in the spotlight. Late on Monday, Standard & Poor's downgraded the country's long-term ratings to 'selective default', the second ratings agency to cut its rating after Athens announced a bond swap plan to reduce its debt burden.
Germany's Bundestag lower house approved the 130 billion euros ($175 billion) rescue programme for Greece, but Chancellor Angela Merkel faced a growing revolt in its coalition, and analysts said the outcome of the vote could weaken her politically and make it harder for her to agree to beef up the European bailout fund.
On Monday, European indexes ended slightly lower after a late rally in oil and defensives helped the benchmarks close well above the day's lows.
The euro zone's blue chip Euro STOXX 50 <.STOXX50E> index has gained 15 percent since mid-December, a rally fuelled in part by the ECB's ultra-cheap funding, and the benchmark is about the trigger a bullish technical signal known as a 'golden cross', as its 50-day moving average is about to break above its 200-day average.
The technical signal would confirm a shift in mid-term momentum, and usually means gains in the index six months down the road.
Chartists at Societe Generale see 2,635 points as the index's current target, although in the very short term, a return to the intermediate resistance around 2,500 points could lead to a pause or a consolidation phase, they said.
We maintain our scenario that the index could reach a peak in spring, completing the intermediate recovery phase that took shape in autumn 2011. Under such a scenario, this recovery it is likely to be followed by sharp downleg out to next autumn, they wrote in a note.
Brent crude futures extended their retreat below $124 on Tuesday, reversing a recent rally that threatened to hurt the global economy, while worries over supply from the Middle East helped stem the slide.
Also helping the mood on Tuesday morning, a report by the GfK market research institute showed German consumer morale hit a year-high heading into March, signalling that the country is weathering the impact of euro zone debt crisis and could avoid slipping into recession despite contracting last quarter.
Quarterly earnings at Germany's largest drugmaker missed expectations on low sales volumes at its chemicals division as it banks on new drug launches to lift earnings this year.
The Dutch navigation and digital map said fourth-quarter sales fell 31 percent to 357 million euros ($478.20 million), in line with forecasts.
PSA PEUGEOT CITROEN
General Motors Co
ROYAL BANK OF SCOTLAND
The lender is closing its Australian fixed income, commodity and currency (FICC) trading desk and moving some of the 80 affected employees and trading to desks in Singapore and London as the bank shrinks to cut its losses.
Belgian financial group KBC and Spain's top lender Banco Santander have agreed to merge their Polish units Bank Zachodni WBK and Kredyt Bank, creating a combined bank worth 5 billion euros, the pair said on Tuesday.
The French retailer stuck to its guns in its increasingly protracted wrangle with Galeries Lafayette, ruling out any sale of its share of their Monoprix joint venture and saying it would only buy out its partner at a fair price.
BANCA MONTE DEI PASCHI DI SIENA
The main foundation shareholder is sounding out creditor banks to sell 13 percent of its controlling stake in the bank to help pay down debt, ANSA reported on Monday, citing sources.
Pioneer Investments, the asset management arm of Italian bank UniCredit, sought to assert its independence from its parent company on Monday, warning that bank owners can screw up fund managers if allowed too much control.
Germany's biggest lender is seeking a new chief executive for its Americas business after Seth Waugh decided to step down.
The call-centre group posted rises in 2011 revenue and profits that it said were in line with its targets and forecast continued organic growth and improved profitability in 2012.
(Reporting by Blaise Robinson; Editing by Mike Nesbit)