Europe Markets

Europe shares close sharply higher on China data, Syria relief

European market closes higher
European market closes higher

European shares closed higher on Tuesday, as the imminent threat of Western military action against Syria receded and fresh Chinese data boosted investor sentiment.

European markets

The pan-European provisionally closed up 1.4 percent at 1,244.60 points, its highest close since May 29, with every key European bourse and industry sector posting gains. The FTSE 100 closed unofficially up 1 percent, the German DAX rallied 2.2 percent, and the French closed up 1.9 percent.

Basic resources stocks were higher by 2.04 percent, after Tuesday's promising data from China for August. Industrial output in the country rose 10.4 percent from a year ago, topping Reuters forecasts for a 9.9 percent rise. Meanwhile, retail sales and fixed asset investment both came in higher than expected.

(Read More: China industrial output picks up further in August)

Traders also cited receding fears of an imminent strike on Syria as a reason for the gains in Europe. President Barack Obama said on Monday that — and that he was uncertain he would win the vote to authorize military action in Congress.

"I'm taking this vote in Congress and what the American people are saying very seriously," Obama told NBC News.

Reports on Tuesday afternoon suggested that Syria had accepted the Russian proposal to put its chemical weapons under international control. The White House announced on Tuesday afternoon that it had agreed to talks to such a cause.

In the U.S., stocks extended their gains across the board on Tuesday, also responding positively to the news, with the Dow Jones Industrial Average jumping more than 100 pointed, lifted by Microsoft and General Electric.

In Europe, Italy's final estimate for second quarter growth came in at -0.2 percent (quarter-on-quarter), in line with forecasts.

In Asia, the Nikkei hit a new one-month high, Australia's S&P ASX 200 rose to a one-week high, and Indian equities rallied 2.6 percent. The Shanghai Composite and South Korea's Kospi both climbed to three-month highs.

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In stocks news, Glencore Xstrata announced on Tuesday it would slash costs and shelve risky projects as it hopes to squeeze more benefits from its takeover of mining group Xstrata earlier in the year. Shares traded 2.319 percent higher.

(Read More: Glencore to beat cost saving target, sees more ahead)

Shares of surged by 13.19 percent as the Finnish refiner upgraded its full-year profit guidance on Tuesday.

Shares of carmakers were higher by 2.5 percent as CEOs met at the Frankfurt Motor Show. Shares of rose by 1.82 percent after the company updated its market forecasts. Shares in Volkswagen led the sector rally, surging 4.5 percent, with Daimler up 2.3 percent.

Shares of construction firm fell by 5.65 percent after insurer Groupama said it had sold its stake in the company.

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