European stocks ended higher on Tuesday, trimming some of the previous day's losses as Royal Bank of Scotland and UBS recovered, while a fall in oil prices helped bolster sentiment.
Stocks also got a boost in late trading after data showed new orders at U.S. factories rose by a stronger-than-expected 1.1 percent in April, easing concerns over the health of the U.S. economy.
"People are realizing that the U.S. economy is not tipping into recession after all," said Francois Chevallier, strategist at VP Finance in Paris.
The FTSEurofirst 300 index of top European shares unofficially closed 0.7 percent higher at 1,328.89 points. The benchmark index slid 1.1 percent on Monday.
Royal Bank of Scotland soared 8.6 percent, propelled by market talk that activist investor TCI may be building a stake and as the end of a rights issue trading period nears, according to dealers. RBS declined to comment.