European markets edged higher in the opening minutes of trade, following a strong Asian market performance, as improved US economic data boosted investor confidence.

The FTSEurofirst 300 index, tracking the region's top shares, gained 0.1 percent to 1,189.6.

The UK's FTSE 100 and Germany's DAX were up 0.3 percent each. Italy's FTSE MIB rose 0.1 percent while Spain's IBEX added 0.5 percent. In France, the CAC-40 rose 0.4 percent.

The single currency remained weak against the dollar, trading at about $1.28.

Latest US economic reports have reinforced recovery hopes in the world's largest economy, boosting global equity market sentiments. Official data showed that durable goods orders rose sharply in February and single-family home prices showed record improvement, but consumer confidence remained relatively weak in March.

Developments in Cyprus are set to remain in focus during the day as the island nation completes capital control measures before its banks resume operations on Thursday. The measures could avert a run on bank deposits as holders of accounts remain worried about their savings.

Speaking at a television interview, Cypriot Finance Minister Michael Sarris said that: "We will look at the best way to limit the possibility of large sums of money leaving, and not imposing punitive conditions on the economy, businesses and individuals".

Thousands of people had earlier staged a protest against the proposal to impose taxes on large investors and asking the government to resign, triggering social stability concerns.

The final reading of Britain's fourth-quarter Gross Domestic Product (GDP) is set for release during the day, which is expected to confirm the earlier estimates of 0.3 percent contraction. Investors will also be watching the euro area consumer and business confidence data expected soon.

The US pending home sales data is also set for release, which could provide a comprehensive picture on the country's housing sector.

Asian markets had ended higher earlier, as the improved US economic indicators boosted sentiments across the region.

Japan's Nikkei gained 0.2 percent to 12493.8 while South Korea's KOSPI was up 0.5 percent to 1993.4. Australia's S&P/ASX 200 added 0.9 percent to 4995.0.

China's Shanghai Composite Index eased rose 0.2 percent to 2301.3. Hong Kong's Hang Seng was up 0.7 percent to 22464.4 towards close.

Earnings-related news also impacted investor confidence in Asia. The financial sector picked up in Hong Kong after major Chinese banks posted 2012 earnings that met analysts' expectations.

Some of the major Japanese exporters edged up in Tokyo as the yen weakened against the dollar after reports that Bank of Japan could look to boost bond purchases at its policy meet in April. The greenback traded at about 94.75 during the day.