Oil and mining shares were among the biggest gainers on the pan-European STOXX 600, after FTSE-listed BP reported a $12.8 billion annual profit
Euro weakened for a second consecutive day on Tuesday after European Central Bank President Christine Lagarde said there is no need for big monetary policy tightening in the euro zone
Markets are on alert for rate rises in both the euro zone and the United States after the ECB last week was considered to have adopted a more hawkish tone.
Asian equities held firm overnight and Wall Street futures rebounded due to better-than-expected earnings from Amazon, which lifted the company's shares about 14% in after-market trade
Strong earnings from Apple provided some encouragement for battered tech and US markets, but traders were struggling to draw a line under a global selloff that has now firmly taken root
The move is attributed to fears over tensions between Russia and the West and the prospect of monetary policy tightening.
Oil prices pulled back too as another bout of risk aversion spread across markets and sent traders looking for safety in government bonds.
Gains in Asia helped to counter the pullback in Europe to keep the MSCI all country stock index in positive territory, up 0.16% at 728 points, but still down about 3.8% so far this year.
London's traders were enjoying their final day of festive rest, but mainland Europe saw a lively start
Europe's STOXX 600 rose 0.1% at 0857 GMT and the MSCI world equity index, which tracks shares in 50 countries, was also up 0.1%. Asian shares were broadly higher amid thin year-end liquidity
Despite fears that the Omicron variant is leading to another round of government restrictions that will slow economic growth, stock markets have held up well and rebounded fast
Markets first dropped on fears over the Omicron variant on Friday last week, and since then have see-sawed
The pan-European STOXX 600 advanced 1% as of 0818 GMT, after a 3.7% slump on Friday, triggered by concerns around the newly discovered variant
STOXX 600 set for worst day in nearly two months
Retail stocks were the top decliners in Europe
The 7-year instrument has been priced at 1.841%, which PFC says is the lowest yield locked in by an Indian issuer in Euro markets
State-owned PFC on Thursday said it has issued bonds worth 300 million euros for a period of seven years.
The Stoxx 600 Europe Index added 0.2% by 8:05 a.m. in London, with miners, consumer products and technology sectors outperforming.
The Stoxx 600 Europe Index was 0.2% lower by 2:15 p.m. in London.
The Stoxx 600 Index was up 0.6% by 12:37 p.m. London time