European shares closed narrowly higher on Tuesday after a mixed bag of earnings reports, fresh economic data released from the euro zone, and a bank sell-off led by Barclays.
The FTSEurofirst 300 Index provisionally closed up 0.1 percent, with French telecoms company Alcatel Lucent leading the French Cac, after it reported strong growth in the U.S, despite posting a net loss for the second quarter. Shares closed up roughly 14.16 percent.
International Personal Finance was Europe's biggest gainer after the release of the company's first half earnings, with results significantly ahead of expectations. Pre-tax profits rose 35 percent to £42.3 million and the interim dividend of 3.8p per share was 17.5 percent higher than a year ago. Shares closed up approximately 14.86 percent.
Shares of U.K. broadcaster ITV provisionally closed 6.4 percent higher after reporting a profit rise in its first half. And UBS reported a net profit of 690 million Swiss francs ($740 million) for the second quarter and its stock closed up around 2.3 percent on Tuesday.
In the U.S., stocks held their modest gains across the board Tuesday, recovering from a decline in the previous session, following the latest consumer confidence report and as investors looked ahead to the Federal Reserve's policy statement.
However, back in Europe, gains were offset by several key companies failing to meet earnings expectations.
Barclays led a sell-off in banks after announcing a £5.8 billion rights issue and disappointing earnings. Shares of the U.K. bank closed provisionally down 5.7 percent.
(Read More: Barclays plans $9 billion cash call after mis-selling hit)
Shares of Deutsche Bank closed around 3.9 percent down as its profit missed estimates. The group reported a hit by legal charges.
(Read More: Deutsche Bank profit misses, hit by legal charges)
Shares of oil giant BP closed down roughly 3.4 percent after it reported an earnings missed and it raised the provisions for its oil spill charges.
Just over a third of the European earnings season has now passed, and according to Thomson Reuters StarMine data, 55 percent of companies that have reported so far have met or beaten analysts' forecasts.
(Read More: BP raises oil spill charge as earnings miss)
Meanwhile, Spain's economy contracted 0.1 percent in the second quarter from the first, according to preliminary data released by the country's national statistics agency on Tuesday.
The number was in line with economists' forecasts and marked eight quarters of contraction, but was an improvement on the 0.5 percent figure from the previous quarter. Thus the Spanish IBEX provisionally closed higher by 1.1 percent.
(Read More: Spain's economy contracts for 8th quarter)
In the euro area, economic sentiment data showed a rise to 92.5 in July from 91.3 in June, according to data from the European Commission. This was just below a Reuters forecast of 92.6. German consumer confidence also showed an increase, posting its highest level in nearly six years.
(Read More: Brighter euro zone data offers scope for rate cut)
Market attention will also be on the U.S. central bank's policy meeting which starts on Tuesday, which could indicate when the Fed's massive asset purchase program will be tailed back. Investors are also looking ahead to Thursday, when the Bank of England and European Central Bank hold policy meetings.
(Read More: Fed expectations: Will they stay or will they slow?)
On Tuesday, Japanese stocks rebounded to break a four-day losing streak as the yen renewed its pace of declines while gains in the rest of Asia were capped ahead of the central bank meetings.
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