• The pan-European Stoxx 600 ended the session up 0.7% provisionally, with oil and gas stocks jumping 2.2% to lead the gains.
• Investors are awaiting the U.S. Federal Reserve's Jackson Hole summit for hints at when it may taper its monetary stimulus.
• British supermarket chain Sainsburys surged more than 15% after reports of takeover interest from private equity firms.

LONDON — European stock markets closed higher on Monday, looking to rebound after recording their worst week since February.

The pan-European Stoxx 600 ended the session up 0.7% provisionally, with oil and gas stocks jumping 2.2% to lead the gains.

Shares in Asia-Pacific closed higher Monday as Hong Kong's Hang Seng index bounced back after slipping into bear market territory last week.

Stateside, U.S. stocks were also higher after a volatile week on Wall Street. Investors are awaiting the Federal Reserve's Jackson Hole summit for hints at when it may taper its monetary stimulus.

European shares are coming off their sharpest weekly decline since February, as traders monitored issues such as global monetary policy, the delta Covid variant and China's tech crackdown.

On the data front, the euro zone economy lost some momentum in August, but remains on track for strong third-quarter growth, according to preliminary data published Monday.

IHS Markit's flash composite PMI for the euro zone, which looks at activity across both manufacturing and services, hit a two-month low of 59.5 in August versus 60.2 in July.

In the U.K., growth slowed to a six-month low as staff shortages and material supply issues weighed on business activity. The IHS Markit/CIPS flash composite PMI fell to 55.3 from 59.2 in July, its third consecutive monthly decline and lowest reading since February.

In corporate news, Nvidia's $40 billion takeover of British chip designer Arm is hanging in the balance after the U.K.'s competition watchdog said the deal warranted an in-depth investigation.

Meanwhile British asset management firm Janus Henderson has projected that global dividend payouts will rise to $1.39 trillion in 2021, nearing pre-pandemic levels.

In terms of individual share price movement, British supermarket chain Sainsburys surged more than 15% after reports of takeover interest from private equity firms.

At the bottom of the European blue chip index, Switzerland's Cembra Money Bank plummeted over 30% after terminating a credit card partnership with compatriot retailer Migros.

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- CNBC's Ryan Browne contributed to this report.