The FTSE 100 <.FTSE> index is seen rising on Wednesday, following strong gains overnight on Wall Street and in Asia, after positive U.S. and German data alongside a drop in Spain's borrowing costs boosted risk appetite.
The benchmark looks set to climb 24 to 26 points, or as much as 0.5 percent, according to financial bookmakers, after it ended up 54.61 points, or 1 percent, at 5,419.60 on Tuesday, its highest close since December 13.
Short-term financing costs for Spain more than halved as banks lapped up debt at an auction on Tuesday, with much of the purchasing power said to have come from cut-rate loans from the European Central Bank (ECB).
This, alongside data showing a sharp rise in German business sentiment in December and U.S. housing starts hitting a 19-month high in November, helped drive a 2.9 percent rally from U.S. blue chips <.DJI>.
In Asia on Wednesday, MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> advanced 2.7 percent.
The ECB's first offer of three-year loans is key on Wednesday, with a Reuters poll predicting that 250 billion euro (206 billion pounds) could be borrowed. Estimates ranged widely, from as little as 50 billion to as much as 450 billion euros.
The FTSE 100 index has fallen more than 8 percent this year, with sentiment knocked by uncertainty over the outlook for the euro zone and the global economy.
Ratings agency Moody's said on Tuesday that Britain's top-notch debt rating is under threat from the crisis in the euro zone, and further shocks to the country's economy could derail government efforts to balance the budget.
In further gloomy news, British consumer morale hit its lowest in almost three years in December as households became much more pessimistic on the outlook for the next 12 months, a survey from researchers GfK NOP showed.
The main domestic macroeconomic focus on Wednesday will be on minutes from the December Bank of England MPC meeting, due at 9:30 a.m., with November public sector borrowing figures also scheduled for release at 9:30 a.m.
Across the Atlantic, U.S. November existing home sales data is due at 3:00 p.m. (British time)