Search news:     Go!

Eurostocks seen higher, energy sector may shine

LONDON, Aug 15 (Reuters) - 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 centre stage as oil prices hit a one-month high.

The Dow Jones industrial average gained 1.4 percent while the tech-heavy Nasdaq index added 1.6 percent on Monday as Wall Street bet that the Federal Reserve will keep interest rates steady next week after raising them six times since June 1999.

More news from...

Forbes.com News Scan P.M. News Scan A.M. Stock Focus: European Outsourcing Firms Complete headlines...   Newswires U.S. Blue Chips Drop On Retailers' Weak Performance U.S. Urges Supreme Court To Hear Microsoft Appeal This Could Be The End For Concorde Complete headlines...   Message boards  Enter ticker symbol  to see latest posts:   Go!

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 on August 22.

"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 Organisation 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.

UMTS BIDDING NEARS HOME STRETCH

Telecoms were also expected to garner attention as Germany's auction of next-generation mobile phone licences 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 licence auctions in Britain and the Netherlands, the total cost of the licences could reach $46.2 billion. ^ MORE@ Reut02:20 08-15-00

© Copyright 1999 Reuters Limited. Click for restrictions.