LONDON (AFP) - Global stock markets rebounded sharply on Wednesday after recent sustained and heavy losses but the gains reflected quick bargain hunting rather than any major change in sentiment. Dealers said the pick-up was welcome but far from convincing as investors assessed the sharp leg down over the past few weeks that has left Wall Street at 12-year lows as company earnings and dividends tumble. The outlook for dividends - the investment return that is key to share valuations - is poor in the worst global slump in decades, putting markets under sustained pressure. Investors have been waiting for months for the first signs that government bank bailouts and stimulus packages costing trillions of dollars could finally be getting results but dealers said there is little to show so far. On Wall Street, shares opened higher on bargain-hunting, with the Dow Jones Industrial Average up 2.11 percent around 1700 GMT. "An underlying sense that the market is oversold and due for a bounce of some sort has mitigated some of the (negative news)," said Patrick O'Hare at Investors largely ignored a report from payrolls firm ADP showing the US private sector shed 697,000 jobs in February, more than expected, as employers slashed payrolls to cope with the shrinking economy. Fred Dickson at DA Davidson & Co. said that after the heavy selling of the past few sessions, the market "may get a little relief" but sentiment was fragile ahead of Friday's US employment report which is expected to show another 600,000 jobs have been lost. "While the stock market may be ripe for a technical relief rally, we expect more volatility depending on the daily news flow from Washington," he said. "Investors will be looking ahead to Friday's employment report for the next reading on the economy," he said, but without good news, "it is hard to see any near-term rally marking the end of the current bear (falling) market." In Europe, London FTSE 100 index of leading shares closed up 3.81 percent to 3,645.87 points. In Frankfurt, the DAX index jumped 5.43 percent to 3,890.94 points and in Paris the CAC 40 put on 4.74 percent to reach 2,676.68 points. These gains were substantial but did no more than make good the damage done on Monday, dealers noted. "Today saw the inevitable rebound after the vast losses of the past days but we're certainly not out of the woods yet," IG Index analyst Tim Hughes said in London. "The general feeling is that it's still too early to call this a definitive turning point," he added. "It is difficult to expect the equity markets to post a near-term recovery whilst fear and panic appears to characterise the main trading strategy at the moment," Calyon analyst Stuart Bennett said. While some data and official comment is more optimistic about the chances of a pick-up by the end of the year, "the current position remains dire," he said. Earlier in Asia, stocks rose despite surprise data showing Australia on the brink of recession as the economy shrank for the first time in eight years in the fourth quarter of 2008. In Tokyo, buyers moved in after the Nikkei fell close to 26-year lows, with the Nikkei 225 index finishing the day up 0.89 percent. Hong Kong share prices gained 2.5 percent higher and Seoul 3.3 percent but Sydney fell 1.6 percent after the growth data. Chinese shares soared 6.12 percent, extending recent gains on hopes Beijing will unveil more measures to boost the economy which appears to be weathering the crisis better than most.