LIVE MARKETS-European stocks set for a muted start as Asia skids

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EUROPEAN STOCKS SET FOR A MUTED START AS ASIA SKIDS (0526 GMT)

Worries over a strong dollar and rising oil prices are likely to drag on European trading,

after they weighed on Asia overnight.

Italy will remain in the spotlight, after the country's president Sergio Mattarella sought

further consultations over the appointment of political novice Giuseppe Conte as prime minister

of the 5-Star and League coalition government.

"A very last minute failure cannot be rule out, in our view, but a government between 5SM

and L seems very likely at this stage," wrote Barclays (LSE: BARC.L - news) analysts late yesterday. "We expect

President Mattarella to take centre stage to make sure Italy remains strongly committed to its

European and Atlantic (Shanghai: 600558.SS - news) ties," they added.

Asian shares skidded on Tuesday as a strong dollar sapped demand for emerging market assets

while surging oil prices stoked concerns about a flare-up in inflation and faster U.S. interest

rate increases.

Germany's DAX is catching up with European benchmarks after a holiday yesterday, and set for

a strong rise.

Spreadbetters call the DAX 74 points higher at 13,152, while the CAC 40 is called down 2

points at 5,636, and the FTSE 100 4 points lower at 7,855.

(Helen Reid)

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(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)