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European shares close higher on hopes of ECB action

European bourses closed higher on Tuesday, as investors mulled whether new measures by the European Central Bank could soon be announced.

The pan-European FTSEurofirst300 Index closed provisionally higher by 0.3 percent at 1,368 points.

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC 40
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IBEX 35
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Shares had earlier been pushed down by a German Index from the Mannheim-based think tank ZEW. The monthly survey plummeted for the fifth consecutive month to a reading of 33.1 in May. This was the lowest level since January 2013 and was worse than analysts had predicted in a Reuters poll.

However, the German DAX still closed up 0.6 percent after the report was published.

This was partly due to reports that Germany was now willing to back a negative rate on bank deposits and purchases of packaged loans by the European Central Bank (ECB).This improves the prospect of the ECB announcing policy action at its next Governing Council meeting.

Read MoreGerman Bundesbank to support ECB action if needed: Sources

U.S stocks traded mostly higher on Tuesday, despite retail sales data coming in weaker-than-expected. Retail sales rose 0.1 percent in April, versus an estimate of 0.4 percent growth.

AstraZeneca strong

In individual stock news, AstraZeneca's shares closed up around 0.7 percent, as U.S. drugs maker Pfizer's acquisition attempts continued. Pfizer Chief Executive Ian Read had gone before U.K. lawmakers on Tuesday to discuss the bid, along with AstraZeneca's Pascal Soriot.

Read MoreAstraZeneca CEO: Any bid would be a distraction

French plane maker Airbus closed up around 6.5 percent, after reporting a narrower-than-expected 5 percent drop in core earnings.

However, the U.K.'s EasyJet closed down around 4.2 percent. This was despite the airline delivering earnings that beat its own forecasts, and highlighting that it was on track for more organic growth in 2014.

Read MoreEasyJet beats forecasts, eyes organic growth


Meanwhile, U.K. housebuilder Taylor Wimpey closed up around 7.6 percent after releasing a promising trading update.

In Germany, shares of Thyssenkrupp closed up around 4 percent after it raised its profit outlook for 2014, due to cost-cutting and increased demand.

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