European Shares Set to Bounce from 2-Day Drop

European stocks were set to bounce back on Wednesday after a two-session drop, as investors shrug off economic concerns and fresh worries over the credit crisis that had hit U.S. shares overnight.

A report in the Daily Telegraph newspaper that says the British government has drafted a plan to nationalize troubled mortgage lender Northern Rock if it fails to strike a deal with private buyers could also lend support.

Financial bookmakers, or spread betters, in London expected Britain's FTSE 100 index to open between 18 and 20 points higher, the German DAX between 12 and 15 points higher and the French CAC 40 7 to 15 points higher.

The FTSEurofirst 300 index of top European shares closed 1.3 percent lower at 1,500.47 points on Tuesday, as banks retreated on renewed concerns over their exposure to the credit crunch, while Nokia fell after its trading update disappointed investors.