FTSE set to sink over econ worries

LONDON (Reuters) - The FTSE 100 .FTSE is seen opening 26-29 points lower on Tuesday retreating after sharp gains the previous session, with investors uncertain about prospects for economic recovery.

The blue-chip index is seen by financial bookmakers falling around 0.6 percent after it gained 1.2 percent on Monday to close at 5,104.50.

Investors will closely watch the financial sector with Britain set to announce a long-awaited deal with its bailed-out banks.

The deal is set to including a record rights issue by Lloyds Banking Group (LLOY.L) and hefty disposals for Royal Bank of Scotland (RBS.L) to appease the EU regulation and boost competition.

Wall Street ended higher on Monday lifted by solid economic data, but, with Japan closed, Asian markets ex-Japan retreated 0.5 percent.

(Reporting by Simon Falush)