The pan-European STOXX 600 index climbed 0.5%, rebounding from a "flash crash" in the previous session caused by a single sell order trade by Citigroup Inc.

Oil & gas jumped 4.1% to lead gains among European sectors, boosted by BP, which rose 5.8%, as a strong operational performance driven by high oil and gas prices helped the British energy company increase share buybacks.

Economically sensitive sectors such as banks and automakers advanced about 2% each, leading gains early on Tuesday as German 10-year bond yields hit 1% for the first time since June 2015. [GVD/EUR]

Overnight, the U.S. 10-year Treasury yield hit 3% for the first time since December 2018 ahead of a Federal Reserve meeting on Wednesday, when policymakers are expected to hike rate by 50 basis points to contain soaring prices. [US/]

European stocks had a rough April, when worries about aggressive monetary policy tightening, China's COVID lockdown and the Ukraine war stoked concerns about a sharp global economic slowdown.

"The narrative so far this year has very much been inflation and interest rate driven. What the markets are trying to assess now is a slowdown in global growth and what impact that has on monetary policy going forward," said Dan Boardman-Weston, chief executive officer at BRI Wealth Management.

Data showed euro zone producer prices surged more than expected in March as energy prices more than doubled year-on-year, while unemployment hit a new record low.

Jack Allen-Reynolds, senior Europe economist at Capital Economics said supply problems faced by euro-zone companies have eased a little this year, but remain intense. "This will continue to weigh on production and keep inflation high."

French bank BNP Paribas jumped 5.2% as it posted a better-than-expected 19% rise in net income as trading boomed and reaffirmed its medium-term profitability targets.

Nearly half of the STOXX 600 companies have reported first-quarter results so far, and 71% of those have topped analysts' earnings estimates, as per Refinitiv IBES data, with the biggest beats coming from energy and materials sectors.

German chemicals maker Covestro slid 4.9% after it warned COVID-19 lockdowns in China will significantly affect business in the second quarter.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu, Sriraj Kalluvila and Barbara Lewis)

By Sruthi Shankar and Shreyashi Sanyal