European shares closed near multi-near highs on Tuesday, boosted by reassurances from the Bank of Japan and the European Central Bank that ultra-loose monetary policy will continue. This came after a volatile few days of trading, as fears of an end to asset purchases by the U.S. Federal Reserve led to a global decline in stocks.
(Read More: Japan's Nikkei—Stable Now, but for How Much Longer?)
The pan-European FTSEurofirst 300 Index closed provisionally up 1.5 percent at 1,248.65 points on Tuesday, having hit a 5-1/2-year high of 1,258.09 last week. European indexes were boosted by an uptick in shares in U.K. bank HSBC, which close over 2 percent higher.
(Read More: Nikkei Jumps Over 1% After Volatile Morning)
European shares were also boosted on Tuesday afternoon by two upbeat economic reports from the U.S., including one which showed consumer confidence surged to its highest level in five years in May.
In addition, the U.S.'s Case Shiller home price index logged its best annual gain in nearly seven years. Home prices across 20 U.S. cities jumped 10.9 percent year-over-year, beating expectations for a 10.2 percent gain.
Back in Europe, Bank of France Governor Christian Noyer held a press conference at 9.00 a.m. London time. He told CNBC the French government should stop hiking taxes, and cut government spending instead.
"I think taxes have been increased overall quite significantly and clearly the effort now for continuation of rebalancing the public finances should be on the expenditure side," said Noyer.
(Read More: S&P: France Must Deliver Promised Budget Cuts)
Bankia Shares Tumble
In stocks news, shares in troubled Spanish lender Bankia plummeted after analysts said there was little hope of recovery for the bank, despite a cash injection.
(Read More: Bankia Shares Tumble 20% Despite Cash Injection)