The FTSE 100 <.FTSE> index is seen opening up 20-24 points, or 0.4 percent on Tuesday, according to financial bookmakers, rallying after two sessions of declines in tandem with a late recovery from lows on Wall Street and gains in Asia on hopes Greece is moving closer to clinching a debt swap deal.
Greek Prime Minister Lucas Papademos said negotiators had made significant progress in talks to strike a restructuring deal for Greek government debt, with the aim of having a definitive agreement by the end of this week and avoiding a default that would have hefty consequences across the European financial system.
Capping sentiment, however, were concerns that Portugal might need a second rescue as Lisbon's borrowing costs soared in the face of record low business and consumer confidence.
U.S. blue chips <.DJI> closed down just 0.05 percent on Monday, having been around 0.6 percent lower by London's close, in a sign of underlying resilience in spite of worries over euro zone debt situation and some weaker-than-expected U.S. data.
Asian shares rose on Tuesday, with MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> climbing 0.8 percent, on track for a monthly gain of nearly 10 percent after falling in the prior two months.
At the close in London on Monday, the UK blue chip index was down 62.36 points, or 1.1 percent at 5,671.09, extending Friday's falls and retreating further from Thursday's six-month closing high, led by weakness in risk-sensitive banks and commodity issues.
On the data front, British consumer morale climbed to its highest in more than half a year in January, as lower energy costs and retailer discounts provided hard-pressed consumers with some relief, at least for now, researchers GfK NOP said on Tuesday.
The only other domestic data due on Tuesday will be Bank of England consumer credit and mortgage lending numbers, both due at 9:30 a.m.
Across the Atlantic, January's Chicago PMI report will be released at 1445 GMT, followed by January U.S. consumer confidence data at 3 p.m.
(Reporting by Jon Hopkins)