Britain's FTSE 100 <.FTSE> index is seen opening up 9-13 points, or as much as 0.2 percent on Tuesday, according to financial bookmakers, rallying after the previous session's decline as Asian stock markets pushed higher supported by easier crude and firmer base metal prices.
Brent crude futures extended losses, slipping below $124 a barrel on Tuesday, snapping a surge that threatened to dent the global economy, though concerns over supply from the Middle East helped stem the slide.
Meanwhile copper prices gained 0.3 percent in Asia trade, extending Monday's rally after encouraging U.S. economic data improved the demand picture for metals, which should lift heavyweight mining stocks.
The UK blue-chip index closed down 19.58 points, or 0.3 percent, on Monday at 5,915.55, after a late rally to rise back above the 5,900 level.
Banks <.FTNMX8350> led the fallers on Monday, with HSBC
On Wall Street on Monday, the S&P 500 <.SPX> index closed slightly firmer at its highest level since mid-2008, as oil prices retreated and data showed further improvement in the U.S. housing market.
In Asia on Tuesday, the MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.8 percent, while Japan's Nikkei 225 <.N225> index was up 0.9 percent.
Banks will stay in focus with the European Central Bank to conduct a longer term refinancing operation on Wednesday with analysts focusing on the size of the gross allotment as well as net new liquidity. A poll showed 30 euro money market traders expect the ECB to allot 500 billion euros, with forecasts ranging from 200 billion to 750 billion euros.
The ECB's first liquidity injection into the system in late December helped stabilise markets by removing concerns about a liquidity crunch in Europe.
Greece's debt concerns will remain an issue as well. Late on Monday, Standard & Poor's downgraded the country's long-term ratings to 'selective default', the second ratings agency to cut its rating after Athens announced a bond swap plan to reduce its debt burden.
Germany's Bundestag lower house approved the 130 billion euros ($175 billion) rescue programme for Greece, but Chancellor Angela Merkel faced a growing revolt in its coalition, and analysts said the outcome of the vote could weaken her politically and make it harder for her to agree to beef up the European bailout fund.
Meanwhile, highly-indebted and struggling Portugal looked likely to win a positive assessment for its economic reform and cost-cutting efforts from the European Union, the ECB and the International Monetary Fund. That should ensure approval of the next tranche of money under a bailout.
On the domestic data front, February's CBI distributive trades index will be released at 1100 GMT, with a reading of -19 forecast, up from -22 in January.
Across the Atlantic, January U.S. durable goods orders will be released at 1330 GMT, while February U.S. consumer confidence data is due at 1500 GMT.
UK stocks to watch on Tuesday are:
Britain will end aggressive tax avoidance schemes used by banks from the profit they can make buying back their own bonds, a move that could cost Barclays more than 100 million pounds.
HSBC said on Monday it will likely face criminal or civil charges from an expanding investigation into its ties to allegedly illegal money transactions, including some tied to Iran.
ROYAL BANK OF SCOTLAND
RBS is closing its Australian fixed income, commodity and currency (FICC) trading desk and moving some of the 80 affected employees and trading desks to Singapore and London as the bank shrinks to cut its losses.
BAE Systems and Science Applications International Corp
The overseas investment arm of Indian oil producer Oil and Natural Gas Corp
Ophir has been tipped as the next independent oil explorer to receive a takeover offer from an oil major, possibly BP
The hotels and leisure firm issues a trading update.
The autos and aerospace parts maker posts full-year results.
The outsourcing firm reports full-year results.
The Irish building materials group unveils fourth-quarter results.
UNITED BUSINESS MEDIA
The media and exhibitions group delivers full-year results.
AZ ELECTRONIC MATERIALS
The specialist electronic materials firm posts full-year results.
The price comparison website reports full-year results.
The digital sports specialist reveals full-year results.
The sub-prime lender reports full-year results.
The housebuilder posts full-year results.
The engineer delivers full-year results.
The translation software firm unveils full-year results.
The healthcare technology group posts first-half results.
GOALS SOCCER CENTRES
The soccer schools operator reports full-year results.
The information and training group reveals first-half results.
The engineering and environmental consultancy posts second-quarter results.
The television production group unveils first-half results.
The outsourcing and recruitment group holds its annual general meeting.
(Editing by Will Waterman)