LONDON: European stocks rose on Monday after a bruising sell-off last week on global growth worries, with a rebound in luxury stocks and M&A speculation related to British supermarket chains supporting the main indexes.

Britain’s second-largest grocer Sainsbury’s jumped 11.7% to a three-year high following a report that private equity firms were circling the company with a view of possibly launching bids of more than 7 billion pounds ($9.53 billion).

Last week, smaller rival Morrisons backed US private equity group Clayton, Dubilier & Rice’s 7-billion-pounds buyout offer.

Morrisons was flat after a multi-year high on Friday, while Tesco gained 1.9%.

Luxury stocks including LVMH, Kering and Moncler, which sold off last week on China’s wealth redistribution plans, clawed back some of the losses. They were up between 2.0% and 3.3%.

The pan-European STOXX 600 index rose 0.2% after worries over a surge in COVID-19 cases and tighter scrutiny on Chinese companies drove its worst weekly performance in six months.

The benchmark pared some gains after a survey showed business activity in the euro zone dipped in August from July’s two-decade high pace.

IHS Markit’s Flash Composite Purchasing Managers’ index, fell to 59.5 in August from 60.2 last month. It was ahead of the 50 mark separating growth from contraction, but just shy of a Reuters poll estimate for 59.7.

With a nearly 18% rise so far this year, the STOXX 600 hit record highs earlier this month, but has stumbled recently on worries over the US Federal Reserve’s monetary policy tightening plans and the Delta variant of COVID-19 stalling economic growth.