European markets were expected to open
higher on Tuesday after Wall Street's gained late in the session
as rate rise concerns eased, with the energy sector likely to take
center stage as oil prices hit a one-month high.
The Dow Jones industrial average gained 1.4 percent while the
tech-heavy Nasdaq index added 1.6 percent on Monday as Wall Street
bet that the Federal Reserve will keep interest rates steady next
week after raising them six times since June 1999.
Investors are still waiting for one more critical piece of
data -- Wednesday's U.S. consumer price index -- to complete the
interest rate picture before the Fed's rate-setting committee
meets on Aug. 22.
"Confidence is high that interest rates won't rise, but people
will still be sitting on their hands until they see the CPI
number,'' said a trader in Frankfurt.
Citibank in Frankfurt pegged Germany's DAX index to open at
7,373 points, compared with Monday's close of 7,331.
Oil prices hit $32 a barrel on the New York Mercantile
Exchange on Monday amid tight supplies and mounting concerns that
a tropical storm brewing off the U.S. Gulf could disrupt refining
and production.
Tough talk from oil-producing Venezuela's President Hugo
Chavez added to the bullish mood. Chavez said leaders of the
Organization of Petroleum Exporting Countries needed to keep oil
prices fair and that the cartel should "never allow ourselves to
fall again on our knees.''
The steep prices prompted the Clinton administration to once
again examine ways to ease tight supplies, including loaning
energy firms crude oil from the Strategic Petroleum Reserve.
UMTS BIDDING NEARS HOME STRETCH
Telecoms were also expected to garner attention as Germany's
auction of next-generation mobile phone licenses continues. Bids
topped 78 billion marks ($36.25 billion) on Monday and have
already surpassed the lofty levels reached in Britain's auction
earlier this year.
In a move indicating the auction was entering the home
stretch, regulators cut the lowest amount by which bidders must
raise offers to five percent from 10 percent.
Bears Stearns said judging from similar license auctions in
Britain and the Netherlands, the total cost of the licenses could
reach $46.2 billion.
Finnish telecoms operator Sonera may again be a focus after
the Financial Times said Spain's Telefonica had joined the list of
potential buyers.
Rumors surfaced over the weekend that France Telecom's Orange
mobile unit was interested in buying Sonera, but the chief
executive of Orange told Reuters on Monday the company had not bid
for Sonera.
Other stocks to watch include Philips Electronics, which may
get a boost after top U.S. cable television company AT&T; said it
would buy one million advanced set-top cable boxes from Philips.
Finnish data security software firm F-Secure reported
first-half losses widened but repeated it expected strong growth
in the fourth quarter of this year.
However, the company said its profit target for the last
quarter may be affected if arbitration of a dispute with rival
software security firm SSH was delayed.
Dutch-based cable network operator United Pan-European
Communications posted lower-than-expected net losses. Europe's
largest cable company also said it expected operational
efficiencies would help reduce its 2000 losses before interest,
tax, depreciation and amortization.
German software firm Micrologica was also expected to report
earnings on Tuesday. Its shares jumped 16 percent on Monday in
