European markets climbed on Tuesday as investors in the region assessed the economic outlook and concerns over China’s tightening of Covid restrictions, which are continuing to pressure output.

The pan-European Stoxx 600 closed 0.8% higher provisionally, at its highest level for three months. Oil and gas stocks jumped 4.7% after Saudi Arabia denied a report that OPEC+ may boost oil output. Mining stocks rose 2.7%.

The telecoms, household goods and financial services sectors all slipped around 0.1%.

Investors continue to watch economic data closely and assess how it could affect the trajectory of monetary policy from central banks.

The OECD said Tuesday that Europe will bear the brunt of a global economic slowdown as energy prices spike and business activity wanes due to Russia’s war in Ukraine.

Global investors have taken some heart from recent, lower-than-expected consumer and wholesale inflation prints in the United States, prompting bets that the Federal Reserve would have to slow its aggressive interest rate hikes.

Gains by energy and mining firms led European stocks to a three-month high despite the latest gloomy warnings on the European economic outlook.

The pan-European Stoxx 600 index hit 436.46 points, its highest level since Aug. 22.

Oil and gas stocks were trading 4.6% higher as the basic resources sector added nearly 3%.

Global markets have also been boosted as investors foresee an end in sight for interest rate rises, following a lower than expected inflation reading from the U.S.

— Jenni Reid

Energy stocks boosted by OPEC+ report

Energy firms were the top risers among European firms in afternoon trading, after Saudi Arabia denied a report that OPEC+ may boost oil output.

Scottish oil and gas firm Harbour Energy, Monday’s worst-performing stock, pared its losses to climb 7%, as energy industry pipe manufacturer Tenaris, Spanish energy firm Repsol and the U.K.’s BP all rose 6.5%. Energy giants Shell and Totalenergies both added around 5%.