Europe open: Stocks bounce back at month's end

Having realised that US Federal Reserve was indeed intent on bringing down inflation, following a speech by its chairman on 26 August, investors were waiting on euro area consumer price data for August due out the next day.

Also in their sights was the monthly US jobs report due out on the following Friday, analysts said.

Summing up the choices facing central banks, Michael Hewson, chief market analyst at CMC Markets UK, said: "Having dithered for so long when it came to the dangers that inflation wasn’t going to be transitory, central banks are now faced with two equally unappealing options, without knowing which one is likely to be the least damaging.

"Do nothing and allow inflation to become more persistent and entrenched, killing demand that way, or hike aggressively in an attempt to kill demand more quickly, and drive prices lower that way."

As of 0913 BST, the German Dax was gaining 1.47% to 13,082.79, the FTSE Mib was ahead by 1.40% to 22,144.54 and the Cac-40 was up by 1.17% to 6,294.70.

Euro/dollar was up by 0.32% to 1.0029 amid month-end position adjustments, said analysts at Unicredit.

Worth noting, rate-setters at the European Central Bank were due to meet on 8 September amid expectations for a further 50 basis point interest rate hike.

Market participants were also keeping tabs on the news-flow out of Ukraine following the launch of a Ukrainian counter-offensive in the country's south.

On the economic side of things, the annual rate of harmonised consumer price gains in Spain slowed to 10.3% in August (consensus: 10.4%) after a reading of 10.7% for July.

Retail sales meanwhile were reported by the country's national statistics office at down by 0.5% year-on-year in July.

At 1000 BST, the European Commission was scheduled to release its economic sentiment index for the euro area in August.

A preliminary reading on German consumer prices for August was set to follow at 1300 BST.