PARIS - European markets posted only modest gains Tuesday as a steady drumbeat of bad news about the global economic recovery kept new bets on stocks in check.

An investor confidence survey in Germany disappointed investors, following news that Japan on Monday became the latest major economy to report slower growth in the second quarter.

In Europe, France's CAC-40 was up 0.9 per cent to 3,631.72, Britain's FTSE 100 was higher by 0.1 per cent at 5,275.44 and Germany's DAX added 0.8 per cent to 6,161.70. Futures pointed to gains at the open later Tuesday on Wall Street with Dow futures up 55 points, or 0.3 per cent, at 10,328.00. Broader S&P futures advanced 6.6, or 0.6 per cent, to 1,083.70.

Germany's ZEW institute's monthly confidence index fell more than expected on worries that slowing global growth may hurt the country's export-led recovery.

There was downbeat news on inflation in Britain, where rising prices continue to outpace the government's 2 per cent target in July, with the biggest monthly jump in food prices in two years.

Investors were getting ready for a slew of economic data out of the U.S. later in the day, with July industrial production, housing starts, building permits and producer price inflation all set for release.

Oil prices edged above $75 a barrel in Asia for the first time in five days but gains were tempered by uncertainty about the strength of demand for fuel in the second half of the year.

Investors have been unnerved by figures showing the U.S. economic recovery is stumbling while China, which helped lead the world out of last year's recession, is also slowing as Beijing clamps down on credit to prevent overheating.

"The market has grown cautious as confidence in economic recovery waned. Nevertheless, an economic slowdown is unlikely to turn into a double dip recession," Daewoo Securities said in a report.

Among the advancers in Asia was China's Shanghai Composite Index, which added 0.4 per cent to 2,671.89 and South Korea's Kospi, up 0.7 per cent to 1,755.03. Hong Kong's Hang Seng rose 0.1 per cent to 21,137.43.

Australia's S&P/ASX 200 climbed 0.9 per cent to 4,477.00. Volume was light ahead of national elections on Saturday. Markets in India, Malaysia, Thailand and the Philippines also gained.

Sustained strength in the yen magnified lacklustre sentiment in Japan, where the Nikkei 225 stock average fell 34.99 points, or 0.4 per cent, to 9,161.68.

Japanese exporters, whose overseas earnings shrink when the yen climbs, came under selling pressure.

Elsewhere, Singapore's index lost 0.3 per cent to 2,925.94 and Taiwan's benchmark slipped 0.1 per cent to 7,931.09. New Zealand's market also fell.

In currencies, the euro climbed to $1.2878 from $1.2822.

Benchmark crude for September delivery was up 33 cents at $75.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 15 cents on Monday to settle at $75.24.