Earnings season continued to be a key focus for markets in Europe, with shares of Zurich Insurance finished 1.8 percent lower on Tuesday after the company said it was weighing up a bid for British rival RSA Insurance Group. The U.K insurer however, soared to the top of the Stoxx 600, finishing up around 18 percent.
Diageo shares closed flat on news that the global drinks maker is planning to restructure its South African and Namibian operations and sell equity stakes in its joint ventures in the region to Heineken. However, by mid-afternoon shares in the alcohol brand were trading flat.
BP, one of the world's biggest oil companies, announced a second-quarter replacement cost loss of $6.3 billion Tuesday, and warned that low oil prices are here to stay. Its shares were initially trading lower by 0.8 percent Tuesday, but pared losses to finish up 1.4 percent.
French tire-maker Michelin posted solid gains in first-half sales and profit on Tuesday but warned that second-half profit growth will be held back by by agreements restricting its ability to pass raw-material cost increases to customers. Shares of the company fell close to bottom of the Stoxx 600, down over 6 percent.
U.S. stocks traded mostly higher Tuesday as investors found encouragement from some recovery in Chinese stocks and eyed mixed earnings as the Federal Reserve began its two-day meeting.