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European Shares Seen Higher On Growth Hopes

European shares are seen opening higher on Tuesday after data showed business activity in China's non-manufacturing sector steadily recovered in March on rising new orders.

According to a report published by the China Federation of Logistics and Purchasing, the purchasing managers' index for the service sector rose to a six-month high of 58 in March from 48.4 in the previous month.

Having said that, Asian markets are trading on a mixed note, with markets in Japan, New Zealand, Singapore and Taiwan slipping into the red, as commodities retreated on profit taking and a fall in U.S. Treasury yields pushed the dollar to a three-week low against the yen.

Meanwhile, the Reserve Bank of Australia kept official interest rates on hold, but left the door open for a cut as early as next month.

With recent global economic data remaining mixed, investors eagerly await the Fed minutes scheduled to be released later in the global day and U.S. jobs data due later this week for cues to near-term market outlook.

Closer home, the British Chambers of Commerce said that the economy is showing signs of improvement and may avoid a recession. Still, economic growth remains "weak," and a return to a more normal pace of growth is unlikely until 2013, reports quoted BCC chief economist David Kern as saying. The industry group expects the economy to expand 0.3 percent in the first quarter of 2012, after suffering a 0.3 percent contraction in the fourth quarter.

In corporate news, Illumina Inc. announced that its board has unanimously rejected Roche Holding AG's revised offer to acquire Illumina for $51.00 per share in cash.

U.K. drugmaker AstraZeneca and biotech company Amgen said they signed an agreement to jointly develop and commercialize five monoclonal antibodies from Amgen's clinical inflammation portfolio.

Belgian biopharmaceutical firm UCB SA said it received the U.S. FDA approval for Neupro, used for the treatment of the signs and symptoms of advanced stage idiopathic Parkinson's disease.

Air France, part of Franco-Dutch airline Air France-KLM , said it aims to reduce its controllable costs by 20 percent as part of a new strategic plan.

The European markets closed to the upside on Monday, with better-than-expected manufacturing data from China and the U.S. underpinning sentiment. Bank stocks recovered from early weakness after the German central bank denied reports that it would stop accepting government bonds from Greece, Portugal and Ireland as collateral.

The Euro Stoxx 50 index of eurozone bluechip stocks added a percent and the Stoxx Europe 50 index, which includes some major U.K. companies, climbed 1.6 percent, while around Europe, Switzerland's SMI, France's CAC 40, the German DAX and the U.K.'s FTSE 100 finished up between 1.0 percent and 2.3 percent.

On Wall Street, stocks rebounded after an early setback overnight as traders reacted positively to the latest U.S. manufacturing data. But, construction spending in the U.S. unexpectedly fell in February, with revised January figures also showing a much larger than previously reported decline, the Commerce Department said. The Dow rose 0.4 percent, the tech-heavy Nasdaq climbed 0.9 percent and the S&P 500 gained 0.8 percent.

by RTTNews Staff Writer

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