European stocks rebounded from a six-week low, as energy stocks tracked an oil-price rally and luxury stocks rose after last week’s China-led slump.

The Stoxx 600 was up 0.7% at 10:04 a.m. in London, shrugging off weakness in Asian equities after Chinese banks kept a key interest rate that guides mortgages on hold, a surprise move that sowed confusion over the country’s approach to stemming the nation’s property slump.

TotalEnergies SE, Shell Plc and BP Plc were among the major contributors to European gains, as oil rose for a third day and gas futures soared as much as 18% on fear of supply disruptions. Moncler Spa, Hermes International and LVMH led the rebound in luxury.

Among other individual movers, SBB — the landlord at the center of Sweden’s property crisis — shed more than 8% after it said its chief financial officer would be leaving. Payments company Adyen NV extended last week’s post-earnings slump, as more analysts downgraded the stock or slashed its price target.

This year’s European equity rally has paused this month amid turmoil in China’s property and shadow banking sectors, while signs of resilience in the US economy have fanned worries about higher-for-longer interest rates. The Stoxx 600 is nearing technical oversold territory, although it remains in the range that’s been in place since April.

Focus turns now to the Kansas City Fed’s annual symposium in Jackson Hole on Friday, where an address from Federal Reserve chief Jerome Powell’s will be perused for clues on the central bank’s policy outlook.

“Global risk sentiment is less than ideal as healthy economic data from the US and darker clouds over China cast a shadow on both stock and bond markets,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Still, “the fear of a decidedly hawkish Fed is already priced in, and if there is no more hawkish surprise from this week’s Jackson Hole meeting, tensions among investors could ease by next week, and give markets some breathing room,” Ozkardeskaya said.

SECTORS IN FOCUS:

• Cybersecurity stocks as US network security company Palo Alto surged after projecting stronger billings for the year than Wall Street anticipated, easing fears that a slowdown in demand may weigh on results.
• UK homebuilder stocks after property sellers cut the prices they’re asking at the sharpest pace since December, adding to evidence that soaring interest rates are weighing on the ability of buyers to afford purchases.

For more on equity markets:

• ‘Perfect Storm’ Puts This Year’s Gains at Risk: Taking Stock
• M&A Watch Europe: GAM, TruFin, SBB, Return of the Summer Lull
• US Stock Futures Unchanged

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--With assistance from Michael Msika.