European markets eased in the opening minutes of trade as Cyprus bailout concerns kept investors on the sidelines, overshadowing improved China manufacturing data and the Fed's stimulus reassurances.

The FTSEurofirst 300 index tracking the region's blue-chip stocks eased 0.05 percent to 1,198.3.

The UK's FTSE 100, Germany's DAX and Spain's IBEX fell 0.1 percent. France's CAC-40 and Italy's the FTSE MIB were down 0.3 and 0.2 percent respectively.

The single currency showed modest pickup against the dollar trading at about $1.29.

Cyprus concerns linger as the country's lawmakers consider options to avoid a fiscal crisis. Frenzied crisis discussions between political leaders have so far failed to reach a consensus and talks are now set to continue during the day. The country's banks have been asked to remain shut until next week in a bid to avoid withdrawals.

Reports suggest that Cyprus may consider efforts such as nationalising pension funds, levies on deposits above €100,000 and a request for aid from Russia.

Investors are also keeping a close watch for reactions to the UK budget, which lowered the country's growth estimates. According to the Office for Budget Responsibility, Britain's economy is now set to expand 0.6 percent in 2013, a sharp downward revision from the earlier estimate of 1.2 percent growth. It also noted that net debt may not ease until 2017-18.

Other developments in the region include the release of the UK retail sales figures and the preliminary PMI estimates for France, Germany and the euro area.

Asian markets ended mixed earlier as the US Federal Reserve reemphasised its stimulus commitment and Chinese manufacturing showed improvement, ahead of a key press briefing from Bank of Japan's new bosses.

The Nikkei ended 1.3 percent higher to 12635.7 while South Korea's KOSPI was down 0.4 percent to 1950.8. Australia's S&P/ASX 200 closed 0.2 percent lower to 4959.4.

China's Shanghai Composite Index ended 0.3 percent higher to 2324.2 while Hong Kong's Hang Seng was down 0.2 percent to 22202.7 towards close.

The US Federal Reserve has reaffirmed its commitment to continue economy boosting measures until the labour market achieves significant growth. The central bank's comments helped Asian stocks to post a steady start, offsetting the recent Cyprus-inspired eurozone concerns.

Optimism surrounding the Chinese recovery was reinforced after HSBC's preliminary China Purchasing Managers Index showed that manufacturing activities in the world's second largest economy picked up in the month of March. The index picked up to 51.7 from the 50.4 recorded in the final reading for February, indicating an improvement in conditions.

In Japan, speculation that the national bank's new governor Haruhiko Kuroda will announce aggressive policy changes at his first press conference boosted sentiments. Media reports suggested that the pro-stimulus central bank chief could seek to advance the open-ended asset purchase plan to hasten efforts to meet the 2 percent inflation target.

Meanwhile, in a clear indication of the challenges ahead of the authorities, official data showed that Japan's incurred a trade deficit for the eighth straight month in February. Exports fell 2.9 percent while imports gained 11.9 percent taking the deficit to 777.5bn yen.