The pan-European FTSEurofirst 300 Index provisionally closed flat at 1,344.56 points, despite earlier gains in Asia as China's central bank injected funds to cool money market rates and calm investor fears.
U.S. stocks mostly climbed on Tuesday as Wall Street resumed business after a long holiday weekend, with investors taking a cautious view of earnings from companies including Delta Air Lines and Verizon Communications.
In Europe, French power and transport engineering firm Alstom saw its shares close down by around 13.8 percent after the company lowered its annual profit and cash flow targets, citing a slowdown in orders in thermal power.
Elsewhere, Unilever, the Anglo-Dutch maker of goods such as Ben & Jerry's ice cream and Lipton tea, reported better-than-anticipated 2013 results on Tuesday, with an improved performance in the emerging markets. Shares of the consumer goods maker closed higher by around 1.8 percent.
(Read more: Unilever profit beats, shares jump 5%)
In other news, Germany's ZEW economic sentiment indicator was released on Tuesday, and painted a somewhat mixed picture. The ZEW indicator for January came in at 61.7, below forecasts of 64. However, the current conditions indicator was 41.2, well above expectations of 34.1.
(Read more: German investor sentiment in surprise fall)
French carmaker Peugeot Citroen confirmed that it was pursuing negotiations with China's Dongfeng Motor about taking a stake as part of a possible capital increase of around 3 billion euros ($4.1 billion), Reuters reported on Tuesday. Shares in Peugeot closed higher by around 2 percent.
The news was not so good for fellow French brand Remy Cointreau, with the firm reporting that quarterly sales sank 19 percent, with cognac sales plummeting 32 percent, as the Chinese government crackdown on ostentatious spending hit demand. Remy shares were, however, up 4.5 percent at the close.
Danish industrial enzyme maker Novozymes saw shares finish the day higher by 1.9 percent after it reported that earnings growth would accelerate this year and next, driven by demand for biofuels. The firm is the largest producer of enzymes used in detergents, bioethanol, food and beer.
(Read more: Novozymes hits record high, biofuels to drive growth)
Shares in British bookmaker Ladbrokes provisionally closed down 4.9 percent after JPMorgan cut its price target for the firm to 95p from 140p.
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