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Eurostocks Seen Higher

LONDON — European markets were expected to open higher on Tuesday after Wall Street's gained late in the session as rate rise concerns eased, with the energy sector likely to take center stage as oil prices hit a one-month high.

Investors are still waiting for one more critical piece of data -- Wednesday's U.S. consumer price index -- to complete the interest rate picture before the Fed's rate-setting committee meets.

"Confidence is high that interest rates won't rise, but people will still be sitting on their hands until they see the CPI number,'' said a trader in Frankfurt.

Citibank in Frankfurt pegged Germany's DAX index to open at 7,373 points, compared with Monday's close of 7,331.

Oil prices hit $32 a barrel on the New York Mercantile Exchange on Monday amid tight supplies and mounting concerns that a tropical storm brewing off the U.S. Gulf could disrupt refining and production.

Tough talk from oil-producing Venezuela's President Hugo Chavez added to the bullish mood. Chavez said leaders of the Organization of Petroleum Exporting Countries needed to keep oil prices fair and that the cartel should "never allow ourselves to fall again on our knees.''

The steep prices prompted the Clinton administration to once again examine ways to ease tight supplies, including loaning energy firms crude oil from the Strategic Petroleum Reserve.


Telecoms were also expected to garner attention as Germany's auction of next-generation mobile phone licenses continues. Bids topped 78 billion marks ($36.25 billion) on Monday and have already surpassed the lofty levels reached in Britain's auction earlier this year.

In a move indicating the auction was entering the home stretch, regulators cut the lowest amount by which bidders must raise offers to five percent from 10 percent.

Bears Stearns said judging from similar license auctions in Britain and the Netherlands, the total cost of the licenses could reach $46.2 billion.

Finnish telecoms operator Sonera may again be a focus after the Financial Times said Spain's Telefonica had joined the list of potential buyers.

Rumors surfaced over the weekend that France Telecom's Orange mobile unit was interested in buying Sonera, but the chief executive of Orange told Reuters on Monday the company had not bid for Sonera.

Other stocks to watch include Philips Electronics, which may get a boost after top U.S. cable television company AT&T; said it would buy one million advanced set-top cable boxes from Philips.

Finnish data security software firm F-Secure reported first-half losses widened but repeated it expected strong growth in the fourth quarter of this year.

However, the company said its profit target for the last quarter may be affected if arbitration of a dispute with rival software security firm SSH was delayed.

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