5percent to deal with a deteriorating economy

ID:nL6410970 BG Group (BG.L), StatoilHydro (STL.OL) and Total (TOTF.PA)were up between 0.8 and 3.3 percent. It raises the questions about howreliable Russia is as a supplier," said Joerg Rahn, senioreconomist at MM Warburg. "Investors seem to have (regained) a bit of confidence inthe market and are buying into defensive stocks such aspharmaceuticals," he added. The pharmaceutical sector added most points to the index,with AstraZenenca (AZN.L), GlaxoSmithKline (GSK.L) andSanofi-Aventis (SASY.PA) up between 2.7-3.9 percent. In the mining sector, Rio Tinto (RIO.L) and Xstrata (XTA.L)rose 6.1 percent and 8.2 percent respectively, as copperMCU3LX rose 5.5 percent. Later in the session the investor focus will be on the U.S.Institute for Supply Management's non-manufacturing index forDecember and housing market data for November The U.S. FederalReserve will also release the minutes from its December meeting.

"It is likely these sentiment indicators will be ofimportance today The markets has already been discounting asevere downturn. It is now looking for signs things are notgetting worse and starting to bottom out," said McAlinden. (Editing by John Stonestreet) Stocks Global Markets Russia. currency climbing above 94 yen against the Japanese unit toits highest level since the start of December, while the dollarindex hit its highest in three weeks. The single currency fell to its weakest since mid-Decemberto the dollar and sterling after inflation in the region came inat 1.6 percent on the year from 2.1 percent in November to itslowest level in more than two years ID:nL6532861. The ECB targets inflation at just under 2 percent, and manyin the market consider a fall below that level as keeping thedoor open to more aggressive rate cuts from the current 2.5percent to deal with a deteriorating economy. The ECB is expected to cut its key lending rate by 50 basispoints or more at its policy meeting next week.

In the run-up tothe gathering, ECB officials have been suggested that ratescould come down more in the future. Against sterling, the single currency fell roughly 1.5percent to 91.00 pence according to Reuters data, its lowestsince Dec 17. The dollar rallied across the board, climbing as high as94.21 yen JPY according to Reuters data, its highest sincethe start of December. EURO STRUGGLES Tuesday's dismal data comes on the heels of an index of theeuro zone private sector services economy which fell to itslowest in the survey's 10-year history and suggested that theregion will be in a deep recession for at least much of 2009ID:nL6511784.