By Peter Nurse 

Investing.com – European stock markets are expected to open higher Thursday, continuing to stabilize after the sharp losses earlier this week, but doubts about China’s economic expansion remain.

At 2:05 AM ET (0605 GMT), the contract in Germany traded 0.7% higher, in France climbed 0.7% and the contract in the U.K. rose 0.5%.

European investors are set to trade with a positive tone Thursday, still recovering from Tuesday’s rout, prompted by higher U.S. bond yields, which saw the and drop over 2% in Europe and the slump 2.8%, its largest selloff since March, on Wall Street.

With global mergers, acquisitions reaching new records in the third quarter of 2013, companies are starting to prepare for a post Covid future. Refinitiv data showed M&A deals totalled $1.52 trillion in the three months to Sept. 27, up 38% from the same quarter last year and more than any other quarter on record.

Helping the tone were the latest U.K. quarterly figures, which showed that the U.K. economy grew 5.5% in the second quarter, more than expected and a sharp improvement from the 1.6% fall the previous quarter.

However, these gains in Europe are tentative as doubts remain about the strength of China’s economic recovery, the second largest economy in the world, and the main regional driver.

The country’s factory activity contracted in September for the first time since Covid-19 began in 2020, with its falling to 49.6 in September, from 50.1 in August.

Also of concern was a report from Reuters that some of China Evergrande Group’s offshore bondholders have not received due by the end of Wednesday New York time, meaning that the highly indebted property giant has missed its second debt obligation this month.

The European economic data slate is pretty full Thursday, with , numbers and preliminary consumer price inflation numbers from , and also due.

Crude prices edged lower after official figures showed an unexpected rise in U.S. inventories as production in the Gulf of Mexico largely returned to the levels before Hurricane Ida hit around a month ago

inventories were up by 4.6 million barrels last week, data from the showed, compared with expectations for a 1.7 million-barrel drop.

By 2:05 AM ET, U.S. crude futures traded 0.1% lower at $74.75 a barrel, while the contract fell 0.3% to $77.89.

Additionally, rose 0.4% to $1,729.85/oz, while edged higher to 1.1599.