LONDON - The FTSE 100 <.FTSE> index is seen opening up 2-8 points, or 0.1 percent, on Tuesday, according to financial bookmakers, steadying after hefty falls in the previous session, with Wall Street paring its losses by the close.
The blue-chip index closed down 101.35 points, or 1.8 percent, on Monday at 5,427.86, erasing Friday's 0.8 percent rise, as analysts said there was far more work for European leaders to do before the debt crisis can be resolved.
The mood darkened after ratings agency Moody's said it would review ratings of all EU member states in the first quarter of 2012, while rival Fitch said the summit had failed to provide a comprehensive solution to the debt crisis.
It doesn't seem like the 'Santa Clause' rally everyone was hoping for will arrive any time soon. Without a 'big bazooka' for Europe, it is difficult to see where a comprehensive solution to the debt crisis is going to come from, Said Stan Shamu, Market Strategist at IG Markets.
U.S. blue chips <.DJI> also closed with triple-digit losses on Monday, down 1.3 percent, although that was still well off the session low, and the mood in Asian trade remained glum on Tuesday, with Japan's Nikkei <.N225> down 1.2 percent, and MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> losing 1.4 percent.
However, commodity prices were steady in Asian trade, with copper down just 0.1 percent, albeit after posting its biggest decline in three weeks in the previous session, so a recovery from miners could help shares in London.
China's copper imports in November reached their highest level since March 2010, rising 17.9 percent on the month to 452,022 tonnes, preliminary data from China's General Administration of Customs showed on Saturday.
British house prices fell at a slower pace in November as buyer interest picked up modestly, a Royal Institution of Chartered Surveyors survey showed on Tuesday.
Meanwhile, Britons' employment prospects are at their bleakest in three years, a quarterly survey by recruitment firm Manpower suggested on Tuesday, with employers planning no net increase in jobs over the next three months.
British inflation figures will be released at 0930 GMT, with November CPI seen up 0.2 percent on the month, after a 0.1 percent rise in October, giving an annualised increase of 4.8 percent, down from 5.0 percent in the previous month.
Across the Atlantic, U.S. November retail sales numbers are due at 1330 GMT, with a increase of 0.5 percent forecast, the same rise seen in October, while October business inventories will be released at 1500 GMT.
The main focus will be on the outcome of the latest Federal Reserve Open Market Committee (FOMC) meeting, due at 1915 GMT after the London market close.
The Fed looks set to hold off easing monetary policy for a second meeting in a row as it gauges the impact of Europe's crisis on the U.S. economy and ponders additional transparency steps.
(Reporting by Jon Hopkins; Editing by Erica Billingham)