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European stock markets were lower Wednesday but the euro held steady in cautious trade as relief at a massive Greek debt bailout gave way to growing scepticism that the deal can really work.

Dealers said that after months of uncertainty, news of the rescue deal Tuesday was a bit of an anti-climax given doubts about the underlying sums and with Greece's economy seen as too weak to meet the targets set.

International ratings agency Fitch said Wednesday it now considered that a Greek debt default was "highly likely in the near term" as it cut the country's rock-bottom CCC rating to C, just one notch above the lowest at D.

A draft Greek law -- part of the rescue implementation programme -- separately showed that the public deficit this year will be 6.7 per cent of Gross Domestic Product, up from the previous target of 5.4 per cent.

The slipping figures do not inspire confidence in the success of the latest bailout and raise fresh doubts about other weaker eurozone countries struggling to stay afloat, dealers said.

News of a slowdown in eurozone private sector activity added to the negative tone, they added.

In mid-afternoon trade, London's FTSE 100 index of leading shares was down 0.27 per cent, Frankfurt's DAX 30 shed 0.76 per cent and the Paris CAC 40 fell 0.48 per cent. Madrid lost 0.90 per cent and Milan gave up 0.573 per cent.

The European single currency fell to $1.3226 from $1.3238 in New York late on Tuesday.

On Wall Street, stocks opened easier, with the blue-chip Dow Jones Industrial Average fractionally down as the tech-rich Nasdaq Composite shed 0.20 per cent.

Karee Venema at Schaeffer's Investment Research in New York said investors were in wait-and-see mode ahead of US housing data and with Greece on hold for the moment.

"Even though Greece has gotten away with it and not defaulted, eyes are still focused on the eurozone problems," said Valbury Capital broker Jonathan Bristow, noting that worries remained over Italy and Spain's deficit woes.

Dealers said that while the accord ticks all the boxes in terms of financing and Greek commitments, the nation's economy remains in parlous state and Athens faces a giant task in sticking to the plan.

"The passing of the latest bailout plan for Greece, while a welcome relief to a market suffering from bailout fatigue, has to be tempered with the acceptance that the problem hasn't gone away, and for people to think it has would be naive in the extreme," said Michael Hewson, senior analyst at CMC Markets in London.

"Scepticism about it succeeding remains high and Greece's April elections have the potential to be a major flash point, even if we get that far.

"The involvement of the IMF remains a key concern as EU leaders strive to build a firewall big enough to prevent a contagion to Italy and Spain," he added.

Greece was on Wednesday seeking to finalise the legislation needed to implement the bailout package, with politicians keeping a wary eye on the timing of general elections expected in April.

Pollsters say the vote could fail to produce a clear majority, clouding prospects for the accord further.

Asian shares were generally higher earlier in the day. Tokyo rose almost one per cent to the highest level in six-and-a-half months as exporters were boosted by a sliding yen.

Shanghai added 0.93 per cent and Hong Kong gained 0.33 per cent.