European markets opened higher on 3 October after upbeat Chinese economic data overshadowed the ongoing US budget drama.
The Stoxx Europe 600 index opened 0.1% higher to 311.17.
Britain's FTSE 100 and France's CAC 40 opened 0.2% higher.
Germany's DAX 30 opened 0.3% higher.
Italy's FTSE MIB was trading 0.34% higher.
Spain's IBEX 35 was trading 0.13% higher.
In China, government data revealed that the services purchasing manager's index (PMI) jumped to a six-month high in September, suggesting that the world's second largest economy was recovering, albeit at a slow pace. The September reading rose to 55.4, from 53.9 in August.
Earlier, data from two surveys showed that China's manufacturing sector hardly expanded in September, suggesting that a recent recovery in factory activity in China could be losing momentum.
Meanwhile, in the US, a meeting of the leaders of both houses of the US Congress failed to reach an agreement to end the government shutdown as President Barack Obama warned that the country might default on its debt if the shutdown due to the budget impasse is prolonged.
The world's largest economy will run out of cash to pay its bills on 17 October if the government's borrowing limit is not raised. The country's laws limit its borrowing to $16.7tn (£10.3tn, €12.3tn). Market analysts say that the Treasury would probably not be able to pay its bills from October onwards.
In an interview with CNBC TV after the meeting, President Obama blamed the Republicans for putting the country onto a potential debt default course.
"It's important for them to recognise that this is going to have a profound impact on our economy and their bottom lines," Obama said.
"I am exasperated because this is entirely unnecessary."
Market participants in Europe will be tracking services purchasing manager's index (PMI) data coming in from the eurozone's statistics office during the day. The European Central Bank (ECB) left the main eurozone interest rate at the record low 0.5% on 2 October.
Earlier, in Italy, Prime Minister Enrico Letta won a confidence vote in the Italian Senate after Silvio Berlusconi made an abrupt u-turn and announced he would support the government.
Letta won the vote that kept afloat his five-month old coalition by 236 to 70. The vote was triggered by Berlusconi's decision to pull his five ministers from the coalition government triggering a political crisis.
In Asia and the US
In Asia, the Japanese Nikkei finished 0.09% lower on 3 October. Australia's S&P/ASX closed 0.37% higher.
Financial markets in South Korea were closed for the National Foundation Day holiday, while stock markets in mainland China will remain closed till 7 October for the Golden Week holidays.
Earlier in Asia, markets outside Japan traded higher after upbeat Chinese economic data overcame concerns about the continuing US budget deadlock.
In Japan, the country's central bank kick-started a two-day policy meeting and is expected to announce its interest rate decision on 4 October.
"We believe policy makers will keep the current asset purchase target of about JPY 60-70tr unchanged. However, we expect them to upgrade their assessment of the economy for the second time in two months on the back of stronger economic data," Standard Chartered said in a note to clients.
On Wall Street, indices ended lower on 2 October amid growing concerns that the ongoing budget stalemate could prevent US lawmakers from raising the country's debt ceiling.
The Dow finished 58.56 points lower at 15,133.14, pulled down by United Tech and American Express. The S&P 500 closed 1.13 points lower at 1,693.87, while the Nasdaq ended 2.96 points lower at 3,815.02.