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Europe shares close higher; Earnings in focus

European shares closed higher on Tuesday, as investors reacted to corporate earnings and news of fresh sanctions against Russia.

Earnings buoys sentiment

The pan-European FTSEurofirst 300 closed provisionally 0.3 percent higher at 1,373. The U.K. benchmark FTSE 100 closed unofficially 0.3 percent higher, while the French Cac and German Dax were up 0.4 percent and 0.6 percent respectively.

Read MoreNew hope for euro zone as yields hit record lows

Markets were boosted after Wall Street opened higher, although some disappointing earnings from heavily weighted blue-chip companies capped those gains.

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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UBS shares closed roughly 1.8 percent lower, despite the bank posting a rise in second-quarter net profit on Tuesday. Analysts at Citi were concerned that the bank's outlook was cautious, with geopolitical risks and underlying challenges seen as still a feature in its upcoming quarter.

Read MoreUBS posts profit rise, books German tax charge

Meanwhile, shares of BP closed down around 2.5 percent. The oil major announced a 34 percent rise in profits Tuesday, but highlighted concerns over its Russian joint venture, given the current geopolitical uncertainty.

Read MoreBP: Russia still key as production set to dip

Shares of Deutsche Bank closed roughly flat after its second-quarter earnings results showed a 16 percent rise in pre-tax income.

Fresh sanctions

The European Union reached a deal on Tuesday to impose economic sanctions against Russia, targeting its oil industry, defense and sensitive technologies, Reuters reported, citing diplomats. The new, wider measures are in reaction to Russia's alleged involvement in the violence in eastern Ukraine, and come after the shooting down of a passenger jet earlier in the month.

Read MoreEU agrees on economic sanctions against Russia

Key risk-events later this week will remain in focus for European traders on Wednesday. The U.S. Federal Reserve's monetary policy decision is due during the day and the central bank is expected to cut its monthly asset purchases by another $10 billion to $25 billion. U.S. second-quarter gross domestic product and China's official purchasing manager's index (PMI) are also on tap this week.

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