European shares pared gains on Tuesday to close lower, after a raft of euro zone economic data softened earlier rises from positive earnings reports.
The pan-European FTSEurofirst 300 Index closed unofficially 0.2 percent lower at 1,200.30 points, after official data showed euro zone unemployment reached a record high of 12.1 percent in March.
However, the broader STOXX Europe 600 clocked-up its 11th consecutive monthly gain in April, in its longest winning streak since 1997.
Inflation data for the euro zone showed a fall to 1.2 percent, a three year-low, piquing hopes the European Central Bank will announce further monetary easing measures when it meets on Thursday. In a poll by Reuters, 43 out of 76 economists said they expected the central bank to cut rates by 25 basis point.
The bloc's unemployment data reached a record high of 12.1 percent of the working population in March, official data showed on Tuesday.
(Read More: ECB Rate Cut Just Became Even More Likely)
However, upbeat consumer sentiment data from Germany boosted investor confidence in the country, with the Dax the only major country index to end in positive territory. It closed 0.5 percent higher.
Across the Atlantic, U.S. economic data cast a shadow over markets. The Chicago Purchasing Managers' Index, a gauge of manufacturing activity in the Midwest, showed a slight contraction in April, the first since September 2009.
(Read More: Consumer Confidence Jumps; Chicago PMI Contracts)
Deutsche and UBS Earnings Give Banks a Boost
The banking sector was the best sector performer, after better-than-expected earnings from Deutsche Bank and UBS, which led gainers on the STOXX 600.
Shares in Deutsche Bank closed around 6 percent up after the bank announced first quarter earnings. Net profit rose to 1.66 billion euros ($2.16 billion), up nearly 18 percent from 1.41 billion euros a year ago. The bank also announced it would issue 2.8 billion euros of new shares.
(Read More: Deutsche Bank Unveils Forecast-Beating Earnings)
UBS shares closed roughly 5.7 percent higher, after reporting a first-quarter net profit of 988 million Swiss francs ($1.05 billion) versus forecasts of 510 million Swiss francs. Revenues increased to 8 billion Swiss francs from 6.6 billion Swiss francs from a year ago.
(Read More: UBS CEO: Our Radical Overhaul Is Working)
In addition, Lloyds, the U.K.'s part state-owned bank, ended around 1.5 percent higher after reporting a rise in first-quarter profits due to improved margins and lower costs.
Another strong perform was BP; its stock closed around 2.0 percent higher after the oil giant announced a sharp rise in first-quarter earnings with the sale of TNK-BP managing to offset a fall in oil and gas production.
Less good news came from AB Inbev, which fell after it missed earnings forecasts, citing weak demand in its Brazilian market. The Belgian brew closed around 1.1 percent lower.
Among U.S. earnings, Pfizer declined after reporting quarterly results that fell short of Wall Street expectations, citing the stronger dollar and the spin-off of its animal health unit Zoetis. The drugmaker also lowered its full-year outlook.
(Read More: Pfizer Earnings Miss, Pressured by Stronger Dollar)
Unilever Looks to India
In other stock news, Anglo-Dutch consumer goods giant Unilever said it will pay as much as $5.4 billion to raise its stake in its Indian unit, Hindustan Unilever, to around 75 percent.
Plus, British online fashion retailer Asos said it would launch a Chinese-language website in October, as part of its strategy to deliver over 1 billion pounds ($1.6 billion) of sales by 2015.