European stocks edge higher as banks rebound

Fears of a severe supply crunch sent crude prices soaring to $127 a barrel and fuelled concerns about inflation stifling economic growth. French food group Danone slipped 2.7% despite unveiling measures to ramp up revenue growth.

European stocks edged higher on Tuesday, as banking stocks found some reprieve after hefty losses in the past sessions, although the sentiment remained fragile as Moscow warned it could cut gas supplies to Europe.

The region-wide STOXX 600 index rose 0.2% by 0815 GMT, with banks gaining 1.7% after hitting a one-year low in the previous session. European bourses, including the German DAX and Italy's FTSE MIB, confirmed on Monday they were in a bear market — marking 20% or more declines from their record closing highs due to prospects of a ban on Russian oil imports.

Adding to woes, Deputy Prime Minister Alexander Novak said Russia could cut gas supplies via the existing Nord Stream 1 pipeline to Germany, but it has not made such a decision yet. Fears of a severe supply crunch sent crude prices soaring to $127 a barrel and fuelled concerns about inflation stifling economic growth.

French food group Danone slipped 2.7% despite unveiling measures to ramp up revenue growth. Adidas fell 1.9% after the Financial Times reported the German sportswear group has replaced its head of its Greater China operations following a consumer boycott over its stance on Xinjiang cotton.