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Europe ends sharply higher on ECB QE pledge

European equities finished sharply higher on Tuesday, with investors reacting to corporate earnings and focusing on comments by a member of the European Central Bank (ECB).

The pan-European Euro Stoxx 600 Index closed higher by around 1.7 percent, as cyclical stocks like autos posted strong gains.

Benoit Coeure, a member of the European Central Bank's Executive Board, moved to reassure investors on Tuesday morning. He said that the ECB would front-load its asset purchase scheme and said he was concerned about the pace of a recent bond market selloff.

Read MoreEuro, yields slide as ECB gets heavy on QE

The French CAC and the German DAX surged after the dovish comments, with both indices finishing over 2 percent higher. London's FTSE lagged to close up around 0.3 percent.

Symbol
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Price
 
Change
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FTSE
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DAX
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CAC
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IBEX 35
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In individual stocks news, Anglo-Dutch multinational publishing firm Reed Elsevier saw its shares climb by as much as 3 percent due to an analyst upgrade from Goldman Sachs.

European automakers like Daimler and Renault rallied, ending around 3 percent and 5 percent higher respectively after the comments from the ECB.

In other stocks news, Vodafone shares closed more than 3 percent down after posting full-year results.

Across the Atlantic, U.S. stocks traded in a narrow range on Tuesday, trying to build on positive momentum from Europe after a record close on Monday, while investors kept an eye on rising bond yields and the strengthening dollar.

On the data front, U.K. inflation data for April showed that consumer prices fell into deflationary territory for the first time since 1960. Meanwhile, a second reading of euro area inflation confirmed it was flat in April compared to the year before.

German investor sentiment fell sharply in May from the month before, according to a closely-watched survey published on Tuesday.

Concerns about Greece continue to rumble, with the country locked in debates with its international bailout supervisors over a cash-for-reforms deal.

Nonetheless, the Athens Composite index rallied to close around 2.6 percent higher on Tuesday.

"For all the talk of so-called red lines among the various parties involved in the Greece debt talks, markets still remain remarkably sanguine about the prospects of some form of deal between Greece and its creditors in the coming days," Michael Hewson, the chief market analyst at CMC Markets, said in a note.

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