Wall Street closed higher by around 0.2 percent on Monday, after ISM data showed service sector activity grew at the fastest pace in eight months in April.
This provided a positive lead to Asian and European markets on Tuesday. However, downward pressure came in Europe from the continued violence in Ukraine. Fighting continues around the country's eastern border and this is expected to continue to drive safe-haven assets like gold higher.
Read MoreTrack European markets live with CNBC
In stock news, General Electric's bid for Alstom's energy assets was rejected by the French government on Monday, but a deal which also combines the two companies' rail businesses may be in the pipeline.
Bayer on Tuesday said it would acquire the consumer business of Merck & Co for $14.2 billion in cash, the latest deal in a spree of activity in the pharmaceutical space.
U.S. pharmaceutical giant Pfizer suffered a blow to its bid to acquire smaller U.K. rival AstraZeneca, after the latter bolstered its defenses by announcing the earlier-than-expected approval of a new drug.
Read MoreAZ defense against Pfizer boosted by FDA approval