By Peter Nurse
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--European stocks are expected to open slightly higher Wednesday, after modest gains in Asia boosted confidence. However, investors are likely to remain very cautious, given continued signs of the extent of the global economic slowdown.
"With some optimism emerging in Asia overnight, expectations are for the European markets to open mostly higher," said Matt Buckland, a dealer at CMC Markets. "Overall, however, there doesn't seem to be a natural turning point now where investors are looking at stocks as being oversold, and the lack of confidence means risks remain heaped on the downside."
Buckland expects European indexes to push higher at the open, with London's FTSE 100 index set to add 32 points to 3544. He also sees Frankfurt's DAX index rising 24 points to 3715, and the CAC-40 index in Paris up four points to 2559.
Gains on the Shanghai Composite Index resulted in a degree of confidence returning to the markets in Asia, with the index posting gains of more than 4% on hopes the start Thursday of the National People's Congress will lead to further announcements on supportive measures for the economy.
China's February Purchasing Managers' Index also came in at 49.0, compared with January's 45.3 release. While a PMI reading under 50 indicates manufacturing activity is still contracting, the release offers some signs it may be nearing bottom.
Japan's Nikkei 225 index followed the more positive tone set by China, pushing out of the red seen earlier in the day to close 0.9% higher.
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