• Focus will turn this week to monetary policy decisions from major central banks, with the U.S. Federal Reserve expected to announce a half-percentage point increase to its benchmark interest rate on Wednesday.
• Investors digested weak economic data out of China and Germany and a sudden "flash crash" in Sweden's OMX 30 index.

LONDON — European markets closed mostly higher on Tuesday, attempting to claw back Monday's sharp losses, as investors monitored earnings and key monetary policy decisions around the world.

The pan-European Stoxx 600 closed up 0.5%, with oil and gas shares adding over 4% to lead the gains as most sectors and major bourses finished in positive territory.

Corporate earnings continued to drive Europe's most significant individual share price movement. German raw materials company Covestro fell 4.9% after cutting its guidance while Danish facility management company ISS gained 13.6% after strong first-quarter results.

Germany's 10-year bund yield rose above 1% on Tuesday morning for the first time since 2015, just two months after it was below zero. Yields move inversely to prices.

Last week, data showed euro zone inflation reaching a fresh record high of 7.5% in April, piling further pressure on the European Central Bank to hike interest rates in line with more hawkish stances from the U.S. Federal Reserve and Bank of England.

European markets closed sharply lower a day earlier as investors digested weak economic data out of China and Germany, and a sudden "flash crash" in Sweden's OMX 30 index.

Focus will turn this week to monetary policy decisions from major central banks, with the U.S. Federal Reserve expected to announce a half-percentage point increase to its benchmark interest rate on Wednesday. Market fears have been mounting as to how aggressive policymakers will have to be in order to rein in inflation.

Australia on Tuesday hiked its interest rate for the first time in more than a decade as consumer prices surge.

U.S. stocks were higher in morning trade on Tuesday after a volatile session Monday. Wall Street is coming off a brutal April, the worst since March 2020 for the S&P 500 and the Dow.

Global investors continue to monitor the war in Ukraine and its geopolitical implications, with EU leaders set to work on a Russian oil embargo this week.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

— CNBC's Sarah Min contributed to this report.