LONDON, April 2 - European stocks were set to open higher on Wednesday after U.S. stocks stretched their gains, amid fresh evidence that the advance on Baghdad by U.S.-led forces was gathering speed. "When there is better news or progress coming out of Iraq the markets do seem to respond," said Gary Parkinson, analyst at Financial Spreads. Financial spread betters in London said they expected Britain's FTSE 100 <.FTSE> to open up to 60 points up, with Germany's Dax index <.GDAXI> adding up to 45 points and France's CAC-40 <.FCHI> starting up to 25 points higher. Citibank in Frankfurt forecast that the DJ Euro Stoxx 50 index <.STOXX50E> will open 21 points higher at 2,088 points.
Latest reports showed U.S. forces had seized a key bridge on the River Tigris and had taken the main highway from Kut to Baghdad. In overnight news U.S. forces also encircled the key city of Kerbala 110 km south of the Iraq capital, securing all major exit routes in the face of surprisingly light Iraqi opposition, and were now advancing further north. "People also seem to be getting their heads around the prospect that it could be a protracted conflict," said Parkinson. Some market experts, though, were loathe to get carried away with premature hopes of a quick end to the 14-day old Iraq war.
"There are still too many uncertainties out there, and we don't know everything that's happening on the ground," said a senior dealer at Munich broker Merck Fink & Co. "I don't see that much of an advance on Baghdad." In New York on Tuesday, the Dow Jones industrial average <.DJI> closed up 0.97 percent and the tech-laden Nasdaq Composite added 0.53 percent.//