Europe open: Stocks waver amid Greece jitters and ahead of ECB rate announcement

European stocks wavered in a tight range in early trade as investors continued to keep a close eye on any developments in Greece, ahead of a rate announcement by the European Central Bank.

By 0900 BST, the benchmark Stoxx Europe 600 index was up 0.1%, Germany’s DAX was 0.4% higher and France’s CAC 40 was up 0.2%.

On Tuesday, Greece’s creditors drafted the broad outline of an agreement to put to the country’s government, with the €300m debt payment to the International Monetary Fund due Friday.

Greek prime minister Alexis Tsipras is set to meet European Commission President Jean-Claude Juncker in Brussels on Wednesday, where he will be presented with the new plan to solve Greece’s debt crisis.

“The new deal is expected to be presented today, but given it appears little different in tone or red lines, it seems unlikely that after all these weeks and months of toing and froing between Athens and Brussels that any agreement will be forthcoming,” said Michael Hewson, chief market analyst at CMC Markets.

“Certainly expectations of a deal by Friday still seem some way off, particularly given the demeanour of Eurogroup leader Dijsselbloem who appeared rather detached about the prospect of a quick solution,” he said.

“The key focus today will be whether Athens accepts the newly agreed deal outline, having submitted plans of its own earlier this week, with lower budget surplus targets, which it wants to be the basis of any new agreement.”

On Tuesday, Dutch finance minister Jeroen Dijsselbloem said that a deal with Greece was "not theoretically possible this week".

It wasn’t just Greece keeping investors cautious. The European Central Bank rate announcement is due at 1245 BST and with rates widely expected to be left unchanged at 0.05%, the focus will be on chief Mario Draghi’s statement after the announcement.

After data released on Tuesday showed that inflation returned to the Eurozone in May, investors will be looking to see what Draghi has to say about it.

“Draghi’s response in this regard will certainly be worth noting, as will be whether the ECB staff adjust their inflation forecasts upwards,” said CMC’s Hewson.

On the corporate front, shares in supermarket groups Ahold and Delhaize rose following media reports that merger talks between the two could result in an agreement as early as this month.

Syngenta and Monsanto were also on the front foot amid press reports that Monsanto is quietly working with Syngenta to iron out regulatory concerns that could thwart its proposed takeover of the Swiss company.

In London, Dixons Carphone nudged higher after the company said its full-year profits are likely to be slightly above the top end of its previous guidance.

Still to come on the economic calendar, Eurozone retail sales and the unemployment rate for the region are at 1000 BST.

In the US, the ADP employment report will be eyed at 1315 BST for any clues ahead of Friday’s all-important nonfarm payrolls. Also in the US, trade balance figures for April are at 1330 BST, while ISM non-manufacturing is at 1500 BST.