By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets advanced on Tuesday, climbing back from their biggest three-day fall since June last year, as miners rose after a broker upgrade and banks recovered from recent sharp losses.

The Stoxx Europe 600 index added 0.7% to 324.26. On Monday, the benchmark closed at the lowest level since Dec. 20 on renewed uncertainty about emerging markets, after a slowdown in the Chinese manufacturing sector spooked investors out of risky assets such as equities.

Among major movers on Tuesday, Software AG rallied 7.4% after the German company said it reached a record level of license sales in the fourth quarter.

Mining firms were on the rise after Nomura lifted its rating on the European metals-and-mining sector to neutral from bearish. The analysts said BHP Billiton PLC (BHP) , up 1.4%, is now their top pick, followed by Rio Tinto PLC (RIO), 2.5% higher.

Banks were also mostly higher after suffering some of the worst declines in the recent days' market selloff. Shares of Banco Espirito Santo SA gained 2.7% in Lisbon, CaixaBank SA added 4.2% in Madrid, and Lloyds Banking Group PLC (LYG) picked up 2.9% in London.

In macroeconomic news, data from the U.K. Office for National Statistics showed the country's economy expanded at the strongest pace since 2007 last year with gross domestic product rising 1.9%. In the fourth quarter, however, growth slowed down to 0.7% from 0.8% in the previous quarter, which was broadly in line with analyst expectations.

"There seems every reason to believe that robust growth will be sustained into 2014, not least because of the promise of ongoing ultra-loose monetary-policy stance from the Bank of England and additional stimulus such as the Funding for Lending and Help to Buy schemes," Chris Williamson, chief economist at Markit, in a note.

The U.K.'s FTSE 100 index traded 0.4% higher at 6,573.84 after the data. The pound (GBPUSD), however, moved lower as the slower growth rate in the fourth quarter eased pressure on the Bank of England to raise interest rates this year. The currency traded at $1.6550, down from a high of $1.6626 earlier in the day and lower than the $1.6580 recorded late Monday.

France's CAC 40 index picked up 0.8% to 4,177.31, while Germany's DAX 30 index added 0.7% to 9,415.14.

More must-reads from MarketWatch:

Deflation fears, U.K. GDP and big earnings to drive Europe's week ahead

India surprises with rate hike; stocks, rupee fall

Smartphone shipments topped 1 billion in 2013: IDC

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