European shares were set to rally on Monday, tracking gains in the United States and Japan on talk of a U.S. bond insurer rescue plan that could limit damage to the banking industry and credit markets.
Japan's Nikkei 225 Average rose more than 3 percent on Monday, posting a six-week closing high after a newspaper reported that China's sovereign wealth fund planned to buy as much as $10 billion in Japanese stocks.
Bookmakers in London called Britain's FTSE to open up 78 to 86 points, Germany's DAX to open 64 to 84 points higher and France's CAC to open up 59 to 71 points, making for gains of 1.2-1.5 percent.
U.S. stocks staged a late rally on Friday after news that banks were near a deal to bail out bond insurer Ambac Financial, and that a rescue could come this week, though a source told Reuters that while progress had been made, the deal might still fall through.