Investors worn down by Europe's debt crisis

World markets lack conviction ahead of the European summit planned for Friday. Analysts say leaders need to deliver on promises.

NEW YORK (CNNMoney) -- World markets drifted for a second day Wednesday as investors, worn down by Europe's debt crisis, take to the sidelines ahead of Friday's European summit.

"The markets want to see the details, not just the headlines," said Nick Stamenkovic, fixed income strategist at RIA Capital Markets in Edinburgh. "They want to see the nitty-gritty."

Leaders from all 27 members of the European Union are set to gather in Brussels Friday, when details about a new fiscal pact are expected to be unveiled.

On Monday, French President Nicolas Sarkozy and German Chancellor Angela Merkel outlined the basic elements of the plan, which would likely require a number of treaty changes.

A leaked memo from European Commission President Herman Van Rompuy Tuesday proposed a series of stricter rules than those of Merkel and Sarkozy. According to the five-page memo, obtained by CNN, the EC could potentially gain the power to strip voting rights of EU countries that don't meet deficit targets.

Speculation is rife, but it's unclear what will happen at the Friday summit, and whether that action will have enough of an impact.

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"Who can honestly say they know exactly what rescue plans the European governments are still discussing, and which ones have fallen by the wayside never to be seen again?" wrote Deutsche Bank analysts Jim Reid and Colin Tan in a research note. "It's extremely hard to keep up at the moment and extremely hard to analyze ... Even if ideas never see the light of day their mere discussion seems to have the ability to move markets."

Late Tuesday, the Financial Times reported that officials were considering allowing the €440 billion European Financial Stability Facility to continue running alongside the €500 billion European Stability Mechanism, which goes into effect next year. In addition, the funds could be further supplemented by contributions from eurozone nations to the IMF, the report said.

European stocks lost their earlier momentum on Wednesday, and ended the session lower. Britain's FTSE 100 (UKX) slipped 0.4%, the DAX (DAX) in Germany lost 0.6% and France's CAC 40 (CAC40) edged down 0.1%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) ticked up 0.3%, the Hang Seng (HSI) in Hong Kong added 1.6% and Japan's Nikkei (N225) jumped 1.7%.

In the United States, stocks drifted, with the Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) edging lower.

Deutsche Bank analysts were skeptical about the plan.

"We keep moving in circles trying out different permutations and combinations, but in reality where is all this money going to come from?" asked Tan and Reid. "Is this all just a distraction to the fact that the ECB is the only agent with the financial flexibility to ensure that all nation states can refinance?"

The European Central Bank is expected to cut rates on Thursday by at least 25 basis points, Stamenkovic said. ECB President Mario Draghi has also been invited to Friday's EU summit.

"I personally think the measures that come out on Friday won't be enough to satisfy the ECB unless there's a clear commitment to fiscal integration," Stamenkovic said, adding that the ECB will want to see clear penalties for governments failing to adhere to the rules of fiscal union, as well as a timetable for fiscal integration.

"We'll get some building blocks, but it won't be enough to convince the ECB to take a more radical approach," he said.

Christian Schulz, senior economist at Berenberg in London, said that the upcoming summit would stand out from the recent slew of European meetings -- only if the ECB pledges more direct involvement.

Draghi recently hinted the ECB could step up its debt buying program, but only if European leaders come up with a viable solution.

Meanwhile, in another sign of confidence, borrowing costs continued to ease.

The yield on German 10-year bonds, considered the gold standard of European stability, were trading at 2.10% Wednesday. The closely-watched Italian bond yields dropped to 5.99% -- a level that's safe and sane compared to its recent forays above 7%, which got investors worried about the potential for a bailout.

Meanwhile, Standard & Poor's put 15 of 17 eurozone members on credit watch on Monday, signaling a potential downgrade within 90 days.

-- CNN's Nina Dos Santos contributed to this report