European stocks closed sharply higher on Tuesday, after the release of new data on German business activity, hopes of Chinese stimulus measures and less focus on Crimean tensions.
German data pushes stocks higher
The pan-European FTSEurofirst 300 Index provisionally closed higher by 1.3 percent on Tuesday at 1,309.85 points, following the latest data from Germany's Ifo Institute for Economic Research.
The Ifo business climate index is a widely viewed indicator of economic activity in Germany, the euro zone's largest economy. The March data, released on Tuesday morning, showed a fall to 110.7, failing to meet analysts' predictions in a Reuters poll.
However, analysts pointed to the current assessment component of the index - which rose to 115.2 versus 114.4 last month - as evidence of a continued impressive upward trend.
"German businesses are impressed but not shocked by the possible economic impact from the Crimean crisis," Carsten Brzeski, a senior economist at ING, said in a research note after the release. "The German economy is gaining momentum."
The German DAX closed the day unofficially higher by 1.5 percent.
(Read more: German businesses unsettled by Crimea tensions)
Furthermore, European Central Bank governing council member, Jens Weidmann, said that the central bank had not ruled out providing further stimulus to support the euro zone as it slowly recovers from the debt crisis.
European stocks were also buoyed by Wall Street, with U.S. stocks mostly climbing on Tuesday. The Dow and S&P 500 bounced back after two days of losses, as investors considered reports on housing and consumer confidence.
(Read more: If these stocks hold, Nasdaq goes higher: Cramer)
The U.S. Conference Board reported consumer confidence rose to 82.3 in March, up from 78.3 the month before. And the S&P/Case-Shiller index of property values in 20 cities climbed 13.2 percent from January 2013.
Ukraine concerns, which returned to the forefront yesterday, subsided on Tuesday and the Russian MICEX closed higher by two percent, breaking a four-day losing streak.
(Read more: West, Russia signal line drawn in Ukraine crisis)
UK inflation released
On the data front, U.K. consumer prices for February rose 0.5 percent from the month before and showed a rise of 1.7 percent on the year. This met estimates but was below the target set by the Bank of England.
The FTSE 100 rose to close higher by around 1.2 percent..
(Read more: UK inflation sinks to 4-year low)
In corporate news, Kingfisher shares provisionally closed higher by 6 percent after the home improvement retailer reported a rise in annual profit and detailed a $330 million capital return to shareholders.
Another U.K. firm, Wolseley, saw its stock close the day up by around 3.3 percent after it announced a rise in first-half profit, with U.S. and U.K. activity offsetting any weakness in European demand.
Meanwhile, Easyjet shares surged 3.7 percent on Tuesday after the airline slashed its expected profit loss for the next six months.
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