European markets picked up in the opening minutes of trade as investors looked to shrug off Cyprus concerns while awaiting the UK budget.

The FTSEurofirst 300 index tracking the region's blue-chip stocks gained 0.4 percent to 1,199.4.

The UK's FTSE 100 rose 0.4 percent while Germany's DAX added 0.6 percent. Spain's IBEX and France's CAC-40 gained 1 and 0.7 percent respectively.

In Italy, the FTSE MIB rose 0.9 percent.

The single currency firmed against the dollar trading at about $1.29.

The Cypriot parliament has rejected its international lenders' proposal of a one-off bank deposit levy, an essential component of the proposed bailout package, prompting fears on the country's financial future. Investors are now keeping a close watch on Europe's reaction to the development amid renewed fears on the eurozone debt crisis.

The German finance minister Wolfgang Schaeuble has said that he regrets the island nation's decision, suggesting that Cyprus is now in a grave condition. The president of the euro group of finance ministers Jeroen Dijsselbloem, said that the bailout offer is still valid and that it's up to Cyprus to take a final call.

Meanwhile Cyprus is now in talks with Moscow, stoking speculation that it could be looking for alternate aid arrangements from Russia.

Investors are awaiting British Chancellor George Osborne's budget amid speculation about the government's stand in light of weak recent economic conditions. Analysts suggest that Osborne has little room to manoeuvre as he affirms his commitment to the structural deficit reduction plan, but may turn attention to monetary policy.

"The Spring Budgetis likely to be a fairly gloomy affair, with the economic forecasts due to be revised down and the borrowing forecasts set to be revised up," analysts at Capital Economics said in a note.

"The chancellor has indicated that he is unlikely to do anything bold on the fiscal front. Accordingly, a more important question is whether the chancellor will make it easier for monetary policy to support the recovery by altering the Bank of England's remit".

Minutes of the MPC meeting held in March are also set for release during the day. Across the Atlantic, the US Federal Reserve's policy decision is also in focus, although no major change in the current asset purchase plan is expected.

Asian markets had ended mixed earlier as the uncertainty surrounding Cyprus continued to keep investors on the sidelines, although Chinese stocks managed to reverse early losses.

Australia's S&P/ASX 200 ended 0.4 percent lower to 4967.3 while South Korea's benchmark KOSPI was down almost 1 percent to 1959.4.

China's Shanghai Composite Index rose 2.7 percent to 2317.4. Hong Kong's Hang Seng added 0.9 percent to 22248.5. Japanese markets are closed for a holiday.

The Australian resource sector came into focus after the country's chief commodities forecaster said that exports in the sector could decline in the current financial year, although by less than expected. In its quarterly report, the Bureau of Resources and Energy Economics (BREE) has said that earnings from resources and energy commodity exports could drop to A$186bn ($193bn; £127bn) in 2012-13.