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European Stocks Set to Join Global Equities Bounce

European shares are expected to rally for a second day on Tuesday, buoyed by relief that the worst of the credit crunch may be over after three major investment banks unveiled the extent of their subprime-related losses and the Dow Jones hit a record close the day before.

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Spread betters in London expect the FTSE 100 Index to open 30 to 32 points higher, the DAX to open 39 to 47 points up and the CAC 40 to gain 21 to 30 points.

Global equities hit a record high overnight, after the Dow Jones industrial average surged 1.4% to a record close.

Switzerland's UBS and Credit Suisse, along with Citigroup, set out the losses stemming from their subprime investments, pushing up the shares in all three companies as investors hoped the impact of the recent market turmoil may be limited.

On the corporate front on Tuesday, Britain's top retailer, Tesco, is expected to deliver first-half results and is expected to report the slowest growth in its core UK market in more than seven years.

Investors are also preparing for two policy decisions from the European Central Bank and the Bank of England on Thursday against a backdrop of stubbornly high short-term lending rates.