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European Shares Set to Ease, Credit Worries Deepen

European shares are expected to ease on Tuesday, extending the previous day's slide after a sharp drop on Wall Street, as concern about the outlook for financials drags on global equities.

A report in the Wall Street Journal that Lehman Brothers may raise $3-$4 billion in fresh capital, suggesting the bank could post its first quarterly loss since going public, dented the dollar and boosted government bond prices in Asia.

European markets fell on Monday after Bradford & Bingley, the largest British buy-to-let mortgage lender, slashed the price of a planned rights offer by a third to draw a lifeline from a U.S. private equity group.

Financial spreadbetters in London expect Britain's FTSE 100 to open 10 to 20 points lower; Germany's DAX to open 11 to 24 points lower and France's CAC 40 to open 10 to 20 points down.

U.S. markets fell by more than 1 percent on Monday, weighed down by new fears the credit crunch has not yet run its course. Asian markets were also down on Tuesday.

"We're putting it down to seeing a lot of clients selling and they're probably just following the pessimism in the States," one dealer said.

Europe's corporate calendar is light as the first-quarter earnings season draws to a close. French construction and telecoms equipment group Bouygues, budget airline Ryanair and United Utilities are scheduled to report results.

Tuesday's macroeconomic calendar includes euro zone producer prices and GDP as well as U.S. factory orders.