European shares were expected to open higher on Tuesday, with commodity stocks seen in focus after better-than-expected Chinese manufacturing data boosted investor hopes there will be higher demand for metal and oil goods.

The heavily commodity weighted the FTSE 100 <.FTSE> is expected to benefit the most from the positive Chinese purchasing managers' index after Monday's holiday closure, playing catch up to the previous session gains in Europe.

Investors will closely watch the ISM Manufacturing PMI data in the United States next for further signs of recovery in the world's biggest economy, with economists in a Reuters survey expecting a reading of 53.2 versus 52.7 in November.

Continuing on the Manufacturing PMI theme, markets may continue to gain ahead of today's US ISM Manufacturing PMI which is also expected to show a rise, Jonathan Sudaria, Night Dealer at London Capital Group.

By 07:23 a.m. BT, futures for the Euro STOXX 50, for Germany's DAX and for France's CAC were up 0.3 to 1.2 percent.

On Monday, European stocks hit a two-month high in their first session of the year in low volume, with many away due to the Christmas break.

But traders have warned that gains are unlikely to last, Italian bond yields remain close to 7 percent - a level deemed unsustainable - and policymakers have yet to come up with a solution to the euro zone debt crisis.

New rules to enforce budget discipline across the European Union are likely to take centre stage on January 9 when Nicolas Sarkozy is to meet German Chancellor Angela Merkel in Berlin.

The European debt crisis still hovers over the markets shoulder, Sudaria said.

The FTSEurofirst 300 index <.FTEU3> made its worst annual drop since 2008 in 2011 as worries about the region's debt crisis and fears of a global economic slowdown knocked investors appetite for risk.

COMPANIES:

BP

BP called on its contractor Halliburton on Monday to pay all costs and expenses the oil major incurred to clean up the 2010 Gulf of Mexico oil spill, according to a court filing by BP's lead trial attorney.

LLOYDS BANKING GROUP

American shareholders are suing Britain's Lloyds Banking Group and the bank's former executives, saying they were misled over its rescue of fellow lender HBOS in the depths of the financial crisis in 2008.

STANDARD CHARTERED

Peter Sands, chief executive of the Asia-focused bank, told the Sunday Telegraph newspaper in an interview, that he sees a growing likelihood of one or more countries leaving the euro zone, adding political leaders have yet to offer a meaningful solution to the bloc's debt crisis.

AFREN

The energy exploration said on Monday that production at its Ebok field, offshore Nigeria, had reached around 40,000 barrels per day (bpd), taking its end-2011 net output to some 55,400 barrels of oil equivalent per day (boepd), ahead of target.

LVMH, PERNOD RICARD, LANSON-BCC, LAURENT

PERRIER, VRANKEN

French champagne sales managed to weather the economic crisis in 2011, expecting to show 3.5 percent growth thanks to exports to the United States and emerging countries, but a slowdown is in sight, the champagne trade association said.

RENAULT

Fuel-efficient cars and a slew of new SUV models will be unveiled at India's Auto Expo later this week as global carmakers continue to rev up their activity in one of the world's few growth engines despite a recent slowdown in sales.

PETROPLUS

Royal Dutch Shell is closely watching developments at European oil refiner Petroplus, which is closing three of its refineries after running out of money for crude supplies since bankers froze its credit lines abruptly last week.

Workers at the French Petit Couronne refinery owned by Petroplus will meet union representatives from nearby refineries on Wednesday to decide whether to call for strike action after the Swiss refiner announced temporary shutdowns at three plants, a union official said.

FIAT

New car sales in Italy shrank by 15.3 percent in December from a year earlier, and sales dropped 11 percent overall last year, transport ministry data showed on Monday, adding to a gloomy picture for the European car market.

LUFTHANSA

Lufthansa told passengers on Monday to brace for higher ticket prices as it refuses to shoulder the costs of a carbon trading scheme at the centre of a brewing trade spat.

BMW

BMW sees itself as well prepared for any downturn resulting from the euro debt crisis. Our factories are very flexible and can dampen much of the effect through working time accounts, Chief Financial Officer Friedrich Eichiner told the Sueddeutsche Zeitung newspaper. We can deal with a crisis like that of 2008 relatively well thanks to our flexibility, he added.

PREMAFIN

Shares in the holding which controls Italy's largest motor insurer Fondiaria-SAI FOSA.MI, posted another strong rise on Monday on speculation about possible new investors and talk of a merger with insurer Unipol UNPI.MI to boost capital.

(Reporting by Joanne Frearson)