European shares and bonds reversed course today on signs Wall Street would open higher, and the dollar strengthened amid talk of US investment funds pulling money back home.
Fears that the US economy could be headed for a so-called double-dip recession hovered over markets and triggered speculation the US Federal Reserve could cut interest rates.
Earlier losses on European bourse disappeared after US stock index futures implied investors might lift US equities later in the day following five-year lows yesterday.
The tech-heavy Nasdaq fell to its weakest close since April 1997 on Monday, hit by the US economic worries.
After falling as much as 2.4 per cent in early trade, the FTSE Eurotop 300 index was up 0.13 per cent and the narrower DJ Eurostoxx 50 was gaining 0.57 per cent.
Analysts said stock markets were also waiting for results from US giant Cisco Systems, the world's top Internet equipment maker.
It is due to report its fiscal fourth-quarter earnings after the Wall Street closing bell. The dollar rose to its highest level for a month against the yen, euro and Swiss franc today despite the sharp fall on Wall Street overnight.