Shreyashi Kanyal and Sruthi Chankar

(Reuters] European stock rose after a number of optimistic earnings. Banking shares gained because government bond yields hit new highs ahead of faster interest rate rises from global central banks in an effort to curb rising inflation.

Pan-European Index climbed 0.5% after rebounding from the “flash crash”, which was caused by one sell order trade. Citigroup Inc (NYSE:).

Oil & gas jumped 4.1% to lead gains among European sectors, boosted by BP (NYSE:), which rose 5.8%, as a strong operational performance driven by high oil and gas prices helped the British energy company increase share buybacks.

Banks and automakers were the most economically sensitive sector, rising by about 2%. Tuesday’s gains came early in the morning as German 10-year bonds yields reached 1% for first time since June 2015. [GVD/EUR]

Overnight the 3% mark was reached before Wednesday’s Federal Reserve meeting, at which policymakers were expected to raise rate by 50 basis point to control rising prices. [US/]

European stock markets had a difficult April. There were concerns over aggressive monetary tightening and China’s COVID lockingdown. The Ukraine war also fueled fears of a global economic slowdown.

“Inflation and interest rate have been the dominant narratives this year. The market’s current focus is on slowing global growth, and the impact it has on future monetary policies,” stated Dan Boardman Weston chief executive officer at BRI Wealth Management.

According to data, euro zone producer prices surged in March. Energy prices doubled over the year. Unemployment fell to an all-time low.

Jack Allen-Reynolds is a senior Europe economist with Capital Economics. He said that although supply issues faced by companies in the euro zone have gotten less severe this year, they are still very serious. These will remain a major problem for production, and they will also keep inflation high.

French bank BNP Paribas, (OTC:), jumped 5.2% after it reported a higher-than-expected 19% increase in net income due to trading booms and reiterated its medium-term profitability goals.

Nearly half (60%) of STOXX 600 firms have already reported first-quarter results. 71% of these have exceeded analysts’ earnings expectations, according to Refinitiv IBES Data. Energy and the materials sectors have the largest beats.

German chemicals manufacturer Covestro saw its stock drop 4.9% as it stated that COVID-19 lockdowns by China would adversely impact business in the quarter.