Tuesday saw the UK's FTSE rise 0.4% by lunchtime, with Japan's Nikkei having closed up 1.2% buoyed by overnight gains for US tech stocks.

Markets in Asia and Europe had slumped the day before on concerns about US growth and the health of tech firms.

Despite the rebound, caution remains about a possible slowdown, ahead of key company earnings announcements.

In Europe, Germany's Dax index was up 0.37% at 1142 GMT despite a weak showing for the ZEW investor confidence index, while the Paris Cac 40 gained 0.54%.

The technology sector is still the main focus, with chip giant Intel due to report its earnings later this week.

Techs were the main driver for Europe's gains, with German chipmaker Infineon up 1.6%.

Jitters

Monday's declines had been fed by worries about US techs, after weak US consumer confidence data and poor results from IBM and others took 190 points off the Dow Jones index on Friday.

Germany's Dax ended down 2.6% or 110 points at 4,202.2, while in Paris the Cac 40 lost 2.1% or 82.7 points to end at 3,949.6.

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In London, the FTSE 100 gave up 1.3% or 64.5 points to fall to 4,827.1, further hit by investor concern that demand had peaked for steel giant Corus, whose shares finished down 1.5%.

And in Italy car maker Fiat's shares were temporarily suspended after they dropped 10% to a new all-time low on reduced confidence in European car sales.

Historical row

But Japan's Nikkei 225 index suffered the most on Monday, falling 3.8% in the face of both US gloom and ongoing tensions between Japan and China.

A new school textbook in Japan has sparked anger across China, partly prompted by the government but also due to popular pressure, because it downplays the behaviour of Japanese troops before and during World War II.

The subject is a sensitive one in China, and has triggered calls for a boycott of Japanese goods in what is now the country's biggest trading partner.

Markets in the rest of Asia followed suit, with Taiwan's main index down 2.9% and Korea's losing 2.3%. Both recovered on Tuesday.