LONDON (Dow Jones)--European stocks are expected to open higher Tuesday, on thin volumes ahead of the Christmas break, as traders hope for a year-end rally. While the trend is upwards, "volumes remain lackluster," said Chris Weston at IG Markets. "Fundamentals are thin on the ground too, so this does leave us with the risk that any movement could end up being somewhat exaggerated." Weston predicted that London's FTSE 100 index would open 35 points higher at 5927, Frankfurt's DAX up 26 points at 7045 and Paris's CAC-40 14 points ahead at 3899. On the data front, the German GfK consumer confidence survey is due at 0700 GMT and figures on the U.K. public finances are scheduled for 0930 GMT. Earlier, in Asia, shares were higher, with markets in Seoul and Tokyo rising amid cooling tensions on the Korean peninsula. Japan's Nikkei Stock Average was up 1.5%, South Korea's Kospi Composite rose 1.0%, Australia's S&P/ASX 200 was 0.9% higher, China's Shanghai Composite Index gained 0.8%, Hong Kong's Hang Seng Index was up 1.5% and India's Sensex gained 0.7%. Still, markets lacked any real conviction as activity thinned ahead of the holidays, even though many investors were relieved that South Korean artillery tests conducted Monday did not provoke a military response from Pyongyang. As the Christmas break approaches, traders are now looking to the coming year, said analysts. "The recovery of the U.S. economy will be the key theme next year," said Meiwa Securities market analyst Masayoshi Yano. Market players continue to look out for U.S. consumption data, with spending and housing data due this week to be watched for clues on domestic demand. The Bank of Japan's policy board left its super-easy monetary policy unchanged as widely expected, and said its economic assessment remains unchanged from the last review. Australian shares were broadly higher, led by materials stocks. "It's been a very jagged and largely sideways year for the Australian share market," said Macquarie Private Wealth private client adviser, Marcus Droga. "With the U.S. likely to continue its economic recovery, the Australian share market should rally," he said. In the U.S., stocks traded in a narrow range Monday, with a tumble in American Express dragging down the Dow Jones Industrial Average. The blue-chip measure closed down 0.1% at 11,478.13. However, the Nasdaq Composite added 0.2% to 2649.56, its highest close since Dec. 31, 2007. The Standard & Poor's 500-stock index rose 0.2% to 1247.08, its highest close since Sept. 19, 2008. In the foreign exchanges, the euro rose on comments by China's vice premier Wang Qishan that China backed efforts by European officials to stabilize the global markets following the European debt crisis. Market analysts said the remarks suggested that China, a leading creditor nation, is generally satisfied that European Union officials will work to avoid a worsening crisis that has been responsible for the single currency's recent decline and suggested that China may increase the euro-denominated assets in its foreign exchange reserves. "The comments didn't explicitly say this, but the comments implied that China may increase its purchase of euro-zone debts in the nation's foreign reserves," said Yuji Kameoka, chief FX Strategist at Daiwa Institute of Research. The euro hit an intraday high of $1.3202 before easing to $1.3194 at 0725 GMT, still up from $1.3132 late Monday in New York. The dollar was trading at Y83.69, down from Y83.78. Spot gold was little changed at $1388.95 per troy ounce but February Nymex crude oil futures were up 22 cents at $89.59 per barrel. March bund futures were down 0.35 at 124.95.

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