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Europe ekes out gains as oil rallies 2%; bank earnings weigh

European equities ended slightly higher on Tuesday as the rally in oil prices helped shake off weak earnings results from the likes of UBS and Standard Chartered.

The STOXX Europe 600 index closed up 0.4 percent provisionally, despite a wobbly trading session. London's FTSE and France's CAC finished higher, while autos continued to add pressure on Germany's DAX, which closed roughly flat.

Earnings: Banks under pressure

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Investors in Europe were digesting the latest earnings from UBS and Standard Chartered on Tuesday as well as developments in the Volkswagen scandal and news from Shell.

Switzerland's biggest bank UBS posted third-quarter net profit ahead of expectations but said it was under investigation from authorities concerning accounts relating to FIFA. Net profit for the three months to end-September was 2.1 billion Swiss francs, up from 762 million francs a year earlier. Shares of the bank closed down over 4 percent.

Read MoreUBS Q3 net profit hits $2.12B, warns on economic challenges

StanChart announced plans on Tuesday to raise $5.1 billion in new capital via a rights offer and scrapped its dividend as CEO Bill Winters takes drastic action after swinging to an unexpected loss in the third quarter. Shares tanked 6.7 percent.

VW Scandal hurts automakers

Shares of Volkswagen saw more declines Tuesday after U.S. authorities said they're investigating VW's luxury brands, Porsche and Audi, for emission cheating devices The German carmaker denies any wrongdoing. Shares of VW tumbled during trade but pared losses to close down 1.5 percent, adding pressure on Germany's DAX. Porsche shares also slipped, closing down 1.2 percent.

In better news for another carmaker, BMW posted a surprise increase in third quarter operating profit. Earnings before interest and tax (EBIT) rose 4.3 percent to 2.35 billion euros ($2.59 billion) up from 2.25 billion euros in the same period a year before. Shares in the company initially rose at the open however came under pressure, ending down 0.8 percent.

Oil giant Shell announced plans on Tuesday to cut costs and further synergies in order to make its planned $70 billion takeover of BG Group work with oil prices at the mid-$60s-a-barrel level. Shares of Shell and BG Group both closed sharply higher, up over 3.5 and 2.6 percent respectively.

Oil prices jumped 2 percent around Tuesday's close, following the news of a strike from oil workers in Brazil, one of the world's biggest oil producers. Brent was up over 2 percent at $49.74 around the close, while U.S. crude was at $47.20. Oil stocks soared on the back of this, with Seadrill and Subsea 7 finishing up over 6 and 4 percent respectively.

Oil and gas exploration firm, Tullow Oil soared over 17.5 percent at the close, with traders citing merger talk and news on the TEN oil project as reasons for the jump, according to Reuters.

In global markets, U.S. stocks were mostly higher Tuesday, as investors awaited key economic reports and Fed speakers later in the week.

In Asia, most equities advanced on Tuesday, however, markets in China fell short amid jitters surrounding a crackdown on illegal futures trading and ongoing anti-corruption investigations into certain companies.