The pan-European STOXX 600 index rose 0.8% by 0714 GMT, buoyed by gains across all sectors. The index had tumbled 1.1% in the previous session, giving up almost all of Monday’s gains.
Stocks globally recovered after a sell-off, with a gauge of Asian shares rising 0.4% and U.S. stock futures firming.
Following PMI data on Tuesday that showed resilience in euro zone business growth amid a slowdown, a survey on Wednesday showed German consumer morale is projected to inch up in June after falling to a record low in May.
It, however, warned of inflation crimping household spending.
Separate data from Germany showed Europe’s largest economy grew in the first quarter, in line with expectations.
After a hawkish tone from European Central Bank chief Christine Lagarde earlier this week, investors on Wednesday will be watching for minutes of the U.S. Federal Reserve’s previous meeting to asses the thinking among policymakers.
Banks, which benefit when interest rates rise, hit a fresh one-month high and were the biggest boost to the STOXX 600.