Brazil's stock market opened stronger on Monday, helped by gains in European bourses, as investors came to terms with an interest rate rise expected this week, traders said.The Sao Paulo Stock Exchange benchmark Bovespa index was 0.30 percent higher at 22,030 points in early trade.

The local currency, the real, was flat at 2.902 per U.S. dollar as investors awaited the decision on interest rates.

"Markets here have already priced in an expected rate increase by the Central Bank this week, which means things can improve, even if the rise comes as expected," said Alvaro Bandeira, a director at Agora Senior brokerage in Sao Paulo.

"But overseas markets are strong today, and this can help keep the (Bovespa) index afloat," he added.

Brazil's Central Bank begins its monthly two-day rate-setting meeting on Tuesday and the majority of investors expect it to increase rates by at least a quarter percentage point from its current 16 percent.

A Reuters poll last week showed eight out of 20 analysts believed the monetary authority would raise rates by a half percentage point, while five expected a quarter point cut and seven analysts saw rates unchanged.

Traders said local stocks were being kept higher by stronger trading in European bourses for the third consecutive session as well as a technical rebound from a 1.4 percent loss on Friday, which was fueled by rate-hike fears.

But traders said options expiration next week could cause volatility, while rising international oil prices could put a damper over markets.

New York crude futures were trading higher early on Monday on fears Hurricane Ivan could cause disruptions for energy companies operating in the Gulf of Mexico.

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