UK Stocks -- Factors to watch on Monday March 21

LONDON, March 21 (Reuters) - Britain's FTSE 100 .FTSE index is seen
opening up 34-36 points, or 0.6 percent on Monday, according to financial
bookmakers, extending a rally from the end of last week as worries over the
violence in Libya and Japan's nuclear crisis abated slightly.

New of M&A activity in the telecoms sector should also help investor
sentiment, with AT&T (T.N) planning to pay $39 billion for Deutsche Telekom's
(DTEGn.DE) T-Mobile USA. [ID:nN20237333]

The UK blue chip index closed 22.02 points, or 0.4 percent higher on Friday
at 5,718.13, carrying over Thursday's recovery following falls in the six
previous sessions, although the index is still down around 4 percent in March.

Asian shares advanced on Monday, taking their lead from strong pre-weekend
gains on Wall Street, as market players picked up beaten-down stocks after heavy
losses last week.

Investors took some reassurance from reports of progress in repairs at a
crippled Japanese nuclear power plant, and from comments by billionaire investor
Warren Buffett that the recent steep drop in Japanese stocks presented a "buying
opportunity". [ID:nnL3E7EK08V]

Engineers restored electricity to three reactors at the crippled Japanese
nuclear power plant and hoped to test water pumps at the quake-damaged facility
soon. [ID:nL3E7EK08V]

Japanese financial markets were closed for a public holiday on Monday.

Strength in oil prices remained a dampener, however, with Brent crude
futures LCOc1 up around 1.9 percent to just below $116 a barrel, after Western
warplanes and missiles hit Libya at the weekend in a bid to force leader Muammar
Gaddafi to cease fire on rebels and end attacks on civilians. [ID:nLDE72J009]

Unrest in Syria and Yemen over the weekend also kept traders on edge.

On the domestic front, asking prices for houses in England and Wales are 0.9
percent higher than a year earlier, a monthly survey by property website
Rightmove showed on Monday,

However, British households suffered the sharpest deterioration in their
finances in two years this month, a survey by research firm Markit showed on
Monday, underlining the fragility of the economic recovery.

Although the Bank of England's chief economist, Spencer Dale, said in a
report also published on Monday, that the British economy is on a recovery track
and that the weakness of broad money growth may be misleading.

No other British economic data will be released on Monday, although
investors will have February inflation numbers on Tuesday, and retail sales
figures on Thursday to provide pointers to the health of the domestic economy.

In between that data, the minutes from February's Bank of England Monetary
Policy Committee meeting will be published on Wednesday morning, followed by the
British government's 2011 Budget pronouncements in the afternoon.

Across the Atlantic, February's Chicago Fed index will be released at 1230
GMT on Monday, followed by February U.S. existing home sales at 1400 GMT.

The latest quarterly changes to the FTSE 100 index take effect at the start
of trading on Monday, with broadcaster ITV (ITV.L) and energy services supplier
Jhhn Wood Group (WG.L) re-entering Britain's top share index, while wealth
manager and broker Hargreaves Lansdown (HRGV.L) makes its blue chip debut.

Investment company Alliance Trust (ATST.L), miner African Barrick Gold
(ABGL.L), and packaging firm Bunzl (BNZL.L) are demoted to the FTSE 250 .FTSE
index from the blue chips.

* GLOBAL MRKTS-Stocks up as selloff seen overdone, oil up [ID:nL3E7EL01E]

* US STOCKS-Markets up but investors see volatility ahead [ID:nN18290286]

* Brent up near $116; Libya action stokes MEast fears [ID:nL3E7EK0J3]

* Gold rises on growing Middle East tensions, weak dollar [ID:nL3E7EL022]

* Copper steady; eyes China tightening, Mid East turmoil [ID:nL3E7EL056]

UK stocks to watch on Monday are:

DIAGEO (DGE.L)

The world's biggest spirits maker Diageo is reported to be considering a $2
billion bid for tequila brand Jose Cuervo as The Sunday Times said in an
unsourced report that the Beckmann family was in talks to appoint Barclays
(BARC.L) to explore a possible sale of all or part of the brand. [ID:nLDE72J0EU]

ROYAL DUTCH SHELL (RDSa.L)

The oil major is aiming to spend $1 billion a year over the next five years
on shale gas in China if its explorations works under way prove a success, Chief
Executive Peter Voser told Reuters on Sunday, [ID:nLDE72J0BM]

RIO TIONTO (RIO.L)

Rio Tinto has extended its sweetened $3.9 billion bid for Mozambique-focused
coal miner Riversdale Mining RIV.AX by three days. [ID: nSDYHEE7WX]

Also, the global miner is eyeing a tie-up with Russia's Alrosa to develop a
large diamond deposit near the northern port of Archangel, the Financial Times
said on its website on Sunday, citing unnamed sources. [ID:nLDE72J0RN]

HAMMERSON (HMSO.L)

Property group Hammerson has backed plans by the troubled sportswear
retailer JJB to restructure the chain, saying it would vote for the rental cuts
when creditors meet on Tuesday, the Daily Telegraph said on Monday.

BSKYB (BSY.L)

Opponents hoping to block Rupert Murdoch's News Corp (NWSA.O) bid for BSkyB
have privately admitted they have almost no chance of success after failing to
reach a unanimous agreement to go ahead with a legal review, The Financial Times
said on Monday.

HMV GROUP HMV.L

The British retailer will this week outline a rescue plan that will include
the possible sale of book chain Waterstone's, the Sunday Times reported. An HMV
spokesman declined to comment on the report. [ID:nLDE72J07W]

PUNCH TAVERNS (PUB.L)

Britain's biggest pub group, could split itself into two, the Sunday Times
said in a unsourced report which said Chief Executive Ian Dyson was studying a
plan to spin off Punch's better-performing "Spirit" division into a separate
listed company. [ID:nLDE72J06B]

ESSAR ENERGY (ESSR.L)

The India-focused energy firm reports full-year results.

NAUTICAL PETROLEUM NPE.L

The oil explorer posts first-half results.

(Reporting by Jon Hopkins)