By Peter Nurse

Investing.com - European stock markets are expected to open higher Wednesday, regaining some poise after the previous session’s slump on increasing recession fears.

At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 1.1% higher, CAC 40 futures in France climbed 1.2%, and the FTSE 100 futures contract in the U.K. rose 1%.

The region’s main equity indices closed with hefty losses on Tuesday after fresh survey data showed the Eurozone economy edging closer toward contraction. The DAX and the FTSE 100 dropped 2.9%, the CAC 40 fell 2.7%, and the euro slumped to a new 20-year low against the dollar.

This weakness followed the publication of S&P Global's composite purchasing managers index for the single currency bloc, which registered its lowest reading in 16 months.

Adding to the negative sentiment was talk of gas rationing in Europe, a political crisis in Britain, and a fresh flare-up of COVID-19 cases prompting fresh restrictions in Shanghai.

Investors are expected to try and seek out bargains Wednesday, reversing the negative slide, but eyes will also be on the release of the Eurozone retail sales data for May to try and judge the impact on the region’s consumers of the rampant inflation.

German factory orders helped the tone, rising 0.1% on the month in May, an improvement from the revised 1.8% drop in April.

Also of interest stateside will be the release of the minutes from the last Federal Reserve meeting, which resulted in the U.S. central bank raising interest rates by 75 basis points, its largest hike since 1994.

On the corporate front, BMW (ETR:BMWG) will be in the spotlight with the German auto giant set to publish its second-quarter sales.

Oil prices edged higher Wednesday, bouncing back from the previous session’s rout with the focus on supply tightness but concerns about demand destruction remain in the background.

The Organization of the Petroleum Exporting Countries Secretary-General Mohammad Barkindo said on Tuesday that the industry faces some problems due to years of under-investment, adding that supply tightness could be eased if extra supplies from Iran and Venezuela were allowed.

However, additional supply from Iran doesn’t look likely in the near future after the Persian Gulf country rejected a plan to return to the 2015 international nuclear accord, with recent negotiations in Doha a “wasted occasion”, according to Robert Malley, the U.S. Special Envoy for Iran.

These gains follow the oil market’s worst trading day in almost three months as economic slowdown fears gripped markets, with Citigroup saying that crude could fall to $65 this year in the event of a recession.