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European equities ended in positive territory after the approval of Greece's bailout extension plan helped as U.S. Federal Reserve Chair Janet Yellen said it would be several months before the Fed expects to hike interest rates.
The pan-European Euro Stoxx 600 Index closed around 0.6 percent higher after the group of euro country finance ministers announced that it had approved Greece's reform plans, thereby giving the go-ahead for the four-month extension of the bailout program.
The country sent its economic reform plans - which are believed to include measures to crack down on tax evasion and corruption - to the euro zone overnight.
London's FTSE 100 climbed to close at a record high of 6,953 on Tuesday, after a rally in mining stocks helped push the index past its previous record set in 1999 of 6,950.
Shares of the miner BHP Billiton led the sector higher with a rise of over 6 percent. The company reported a 31 percent drop in half-year profit on Monday evening but this was better than consensus forecasts, and a pledge to cut spending also buoyed the stock. The Basic resources sector surged almost 3 percent.
U.S. stocks traded up near highs on Tuesday as the first of Fed Chair Janet Yellen's two-day congressional testimonies indicated that a rate hike would come later rather than sooner.
Yellen said the Fed would not raise rates before it found confidence in the economic recovery, overcoming concerns about the labor market, below-objective inflation and the decline in energy prices.
In Ukraine, the government accused pro-Russian rebels of opening fire with rockets and artillery at villages in southeastern Ukraine on Monday, Reuters reported, dashing hopes that a ceasefire agreed last weekend would be held. Despite the conflict with Russia, President Vladimir Putin told a reporter with Russian State TV company said Monday that war between the countries was unlikely.
Danish bank Jyske saw a fall of over 7 percent after the lender posted an unexpected loss in its fourth quarter. Insurer Delta Lloyd also saw a similar drop with the firm reporting a fall in operating profit for 2014.
On the data front, German final fourth-quarter gross domestic product (GDP) was confirmed at 0.7 percent, compared to the previous three months.
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