LIVE MARKETS-Before the bell: futures up, more defence in STOXX indices

European shares were set to open just a touch higher on Tuesday, remaining within recent price ranges, as trade uncertainty kept gripping markets and traders prepared for another rate cut by the European Central Bank on Thursday.

Ahead of the ECB meeting, flash euro zone inflation figures for May are due later this morning and are expected to set the tone, possibly offering clues about a potential pause in rate cuts in the months ahead as the economy holds up.

EuroSTOXX50 .STOXX50E and FTSE 100 .FTSE futures both rose 0.1-0.2%, around 30 minutes before the cash market open.

Defence stocks could remain supported, with the latest periodical reshuffles indicating the sector will gain greater representation in benchmark indices, following strong gains.

UK defence group Babcock BAB.L will join the STOXX 600 .STOXX as of June 23, along with eight other stocks, according to a statement by the index provider.

Traders also said Germany's Rheinmetall RHMG.DE will replace luxury firm Kering PRTP.PA in the EuroSTOXX50. Reuters has asked STOXX to confirm the news.

Elsewhere, Belgian healthcare real estate company Aedifica AOO.BR agreed to merge with Cofinimmo COFB.BR, creating the largest real estate investment trust in Europe.

Eyes were also on UBS UBSG.S, with the Swiss government expected to propose this week tough new capital rules for the Swiss bank after the 2023 collapse of its rival Credit Suisse.

In earnings, British American Tobacco BATS.L said it would return to revenue and profit growth in the United States this year, and inched up its annual sales growth target to 1-2%.

(Danilo Masoni)