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 DAX Futures contract in Germany traded 0.7% higher, CAC 40 Futures in France climbed 0.7% and the FTSE 100 Futures 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 DAX and CAC 40 drop over 2% in Europe.

Companies are beginning to position for a post-Covid future with global mergers and acquisitions hitting new record highs in the third quarter. 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 GDP 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 manufacturing PMI 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 interest payments due by the end of Wednesday New York time, meaning that the highly indebted property giant has missed its second debt obligation this month.

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

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

The FTSE MIB climbed Down by  0.35% to 25,826.20. In the cash markets, the DAX  Germany was trading up 0.06%  to 15,374.65. CAC 40  in France  rose by 0.48% to 6,592.37 while the FTSE 100  in the U.K. were up  by 0.50% to 7,143.35. ,at the time of writing.