European Stocks Close Higher in Global Rally

European markets closed firmly higher Tuesday, boosted by a rally in the U.S. and Asia and a further retreat by oil prices from record highs.

Earnings dominated trading talk with a host a major European companies issuing results.

BP's replacement cost profit fell 45 percent in the third quarter to $3.867 billion on lower oil and gas production and problems in its refinery division. But the company's net income figure came in line with analysts' expectations, leading to the group's shares closing 1 percent higher on London's FTSE-100 index .

Also in London, shares of sportswear maker Umbro surged 15.3 percent after Nike announced it would buy the company for $580 million.

Anglo-Australian mining giant BHP Billiton also gained, finishing 2.3 percent higher in London, after reporting strong iron and copper output to keep up with surging Chinese demand.

In Germany, Volkswagen was in focus, leading the gainers on the DAX index , as the European Union's top court ruled that a law shielding the automaker from possible takeovers was illegal. Porsche is now clear to make a bid for the company. Shares of VW closed 5.9 percent lower, while Porsche finished 4.1 percent higher.

The Paris CAC-40 also closed higher, with Schneider Electric ending 1.9 percent higher after boosting its full-year sales outlook on strong third-quarter results.

Alfa Laval was Sweden's best performer, finishing 15.3 percent higher following impressive third-quarter results, as well as the group raising guidance for the rest of the year.

And in Amsterdam Akzo Nobel slipped 2 percent. The company said its third-quarter operating profit rose 11 percent but missed analysts' forecasts.