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European Stocks Seen Higher in Quiet Trade

European stocks were expected to open higher on Monday after a ban short-selling implemented by France, Italy, Spain and Belgium last Friday provided some relief for battered European bank stocks, but investor sentiment remains cautious as concerns over the fragility of the global economic recovery persist.

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Jan Mammey | Stock4B | Getty Images

Trading is expected to be thin however with a number of European stock markets, including those in Greece and Italy, closed for a national holiday whille others are open but will likely be quiet.

London's FTSE is expected to open 28 points higher, Germany's DAX is called higher by 47 points and the CAC 40 is predicted to be up by 24 points.

Despite some relief on Friday following the short selling ban and stronger than expected retail data from the US, European shares suffered a third consecutive week of losses.

World Bank president Robert Zoellick warned on Sunday that global markets could be heading into a new "danger zone" due to a loss of market confidence in the economic leadership in Europe and the US and he urged world leaders to act to ensure a global economic recovery remains a possibility.

Asian stocks started the week mostly higher on Monday buoyed by GDP data from Japan showing the economy contracted by less than analysts had predicted.

The dollar and the euro roseto their highest levels against the safe heaven Swiss franc on Monday following a Swiss newspaper report in SonntagZeitung that the Swiss National Bank will press ahead with plans to peg the currency to the euroin an attempt to to curb the Swiss currency's strength.

Angela Merkel and Nicolas Sarkozy will meet in Paris on Tuesday to discuss the debt crisis in the euro zone as they try to calm volatile markets and avoid the panic of recent weeks.

A Financial Times report on Sunday suggested French and German policymakers are reluctant to issue euro zone bonds to helps deal with the crisis in the periphery.

In company news, Royal Dutch Shell said a leak at a platform in the UK North Sea was under control, but environmental activists have criticized the lack of information the company has provided about the spill.