Sharecast - Well-received updates from US tech giants Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) helped to buoy investor sentiment.
"Tuesday seemed to herald the beginning of a much bigger sell-off, but the numbers from Alphabet and Microsoft have steadied the ship for now," said IG chief market analyst Chris Beauchamp.
"The question is now whether other big names this week can do the same, in which case equities might start May on the front foot."
The pan-European Stoxx 600 index was down 0.83% at 463.21 with nearly all major markets lower even if a bit off their worst levels of the session.
Shares in First Republic Bank (NYSE:FRC) nearly halved overnight after the regional US bank posted its latest quarterly figures, saying that deposits dropped 40% to $104.5bn in the first quarter.
However, the Stoxx 600's gauge for lenders' shares dipped just 0.14% to 149.72.
Oil prices were also under pressure, with Brent crude down by 1.6% to $79.31 a barrel as investors fretted about weaker global demand.
And futures for short-term official interest rates pushed back the timing of the next expected rate hike from 2-3 May to 14 June - even if only just.
In equity news, shares in Asia-focused bank Standard Chartered (LON:STAN) gained after posting a 21% rise in pre-tax profit, ahead of estimates.
Stockholm-listed betting and gaming operator Kindred Group PLC (LON:0RDS) shares surged 16% after the company said it had launched a strategic review to consider a potential merger or sale of the company.
Kindred’s board of directors will consider all potential alternatives that can deliver value for the company’s shareholders, including a merger, sale or other possible strategic transactions.
Housebuilders were in favour after well-received results from Persimmon (LON:PSN), which posted a slump in first-quarter completions but said it expects full-year 2023 volumes to be towards the top end of guidance following an improvement in sales rates since the start of the year. Peers followed suit, with Taylor Wimpey (LON:TW) and Barratt (LON:BDEV) also trading up.
Closely followed indices for consumer confidence in France and Germany, for the months of April and May, respectively, both came in ahead of forecasts.
In the background, the German economics ministry bumped up its forecast for the country's GDP growth rate in 2023 by two tenths of a percentage point to 0.4%.