Credit Fears Seen Pushing Europe Stocks Down

European equities are set to start weaker on Tuesday, extending the previous session's losses as markets track sharp falls on Wall Street which was hit by credit worries.

In a light results day, UK bank Barclays is in focus as it issues a trading update in a sector littered with losses linked to the credit crisis.

Financials might however be supported after Citigroup said it is selling a $7.5 billion stake to the investment arm of the Abu Dhabi government, giving the largest U.S. bank fresh capital as it wrestles with the subprime mortgage crisis.

Asian markets recovered from the lows on the Citigroup news.

Financial bookmakers in London expect Britain's FTSE 100 to open down as much as 0.7 percent, Germany's DAX to fall as much as 1 percent lower and France's CAC 40 to weaken as much as 1.1 percent.

U.S. equities extended losses after the close of European trading hours.

The FTSEurofirst 300 index fell 0.6 percent on Monday, taking its drop to 8 percent this month. The index is down 1 percent so far this year.

Markets will also eye data on Germany's Ifo institute's business sentiment climate index, which is seen deteriorating for a sixth consecutive month.