European shares closed higher on Tuesday as easing tensions in Ukraine and stellar earnings reports boosted sentiment.
The pan-European F closed provisionally up 0.6 percent at 1,347.5 points, with most major bourses and sectors posting gains. The German DAX outperformed, unofficially ending 1.0 percent higher.
European markets
Moller-Maersk rises
Denmark's Moller-Maersk reported forecast-beating net profit for its second quarter and said demand for container transportation was set to grow. Its shares closed around 4.9 percent up, leading European benchmarks higher.
Anglo-Australian mining giant BHP Billiton fell to the bottom of the FTSE 100, after it announced plans to spin-off the most profitable part of its business. The company also missed earnings expectations and failed to announce a share buyback. Its shares closed nearly 5 percent lower.
Geopolitical tensions fall
There were positive signs in the Ukraine-Russia dispute this week. Russia said the dispute over its "humanitarian convoy" to Ukraine had been resolved and a Ukrainian official said "moderate progress" had been made after five hours of talks.
Meanwhile, official U.K. inflation figures showed consumer prices slumped to a near-five-year low last month. The year-on-year figure read 1.6 percent, lower than the forecast of 1.8 percent. Sterling fell sharply against the dollar after the release. The FTSE 100 performed in line with other benchmarks, closing unofficially 0.6 percent higher.
Read MoreUK July inflation falls, rate hike move 'squashed'
U.S. stocks climbed on Tuesday, with the Nasdaq Composite building on Monday's 14-year high, as economic reports offered a benign view on inflation and cast a better-than-anticipated light on the housing market.
Follow us on Twitter: @CNBCWorld