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Europe Shares to Open Higher, Eyes on UK Inflation

European shares are expected to open higher on Tuesday, extending the previous session's 29-month closing high, with earnings from Barclays in focus ahead of UK inflation and euro zone growth data.

Traders sit in front of their screens at the stock exchange in Frankfurt/Munich, western Germany.
Martin Oeser | AFP | Getty Images
Traders sit in front of their screens at the stock exchange in Frankfurt/Munich, western Germany.

European shares hit a 29-month closing high on Monday, with miners up after Chinese trade data highlighted strong demand for raw material and as talk of easing inflation in the country capped fears of further tightening.

German lender WestLB is expected to suggest its own break-up to the European Commission on Tuesday to win approval for billions in state aid, three people familiar with the matter told Reuters on Monday.

The EU Commission has set a February 15 deadline for a planned revamp of WestLB in return for a state bailout received in the financial crisis.

The reports that a rescue plan for WestLB was under threat pressured the euro on Monday, pushing it to a three-week low against the dollar.

Finance ministers of the 17 countries that share the euro met in Brussels on Monday to discuss the European Stability Mechanism, which is to take over crisis resolution from mid-2013.

Later, they were joined by European Central Bank President Jean-Claude Trichet and by ministers from the 10 non-euro members of the European Union. The meeting of EU finance ministers continues on Tuesday.

Separately, EU authorities will reveal GDP data for the fourth quarter of 2010 on Tuesday.

Figures released last month showed growth of 0.3 percent in the euro zone and 0.5 percent for the whole of the European Union in the third quarter of 2010.

Macroeconomic data on the agenda on Tuesday includes Germany's ZEW Indicator of Economic Sentiment. The think tank's monthly index will provide investors with further indications on the pace of Germany's recovery.

Spain is set to release inflation data for January.

Technology investors will turn their attention to Barcelona on Tuesday. Telecom executives are gathering at the 2011 Mobile World Congress therefor a week-long parade of technology, gadgets and networking.