European stocks attempted to make gains on Tuesday, but closed mixed as the volatility in oil prices kept investors on edge.
Oil in focus
The pan-European STOXX 600 was wavering around the flat line in late trade, closing down 0.1 percent provisionally. London's FTSE 100 maintained strong gains, while France's CAC closed around the flat line and Germany's DAX slipped into negative territory by the close.
European markets has seen a small boost Tuesday morning from a slight reprieve from the slump in oil prices as the northern hemisphere moves into the peak-demand winter season. However, any gains during the session were capped over supply glut concerns.
The global crude benchmark Brent rebounded from an 11-year low hit on Monday, however it remained under pressure in late trade, last standing at $36.42, while U.S. WTI bounced back, trading at $36.39 per barrel. This recovery pushed oil stocks higher, with BP and Royal Dutch Shell closing over 2 percent higher.
Markets were also driven by news out of China, where economic planners said they would adopt more "flexible" fiscal and monetary policies next year.
China policy hope boosts miners
The autos sector was a beneficiary of the oil price bounce as well as the news out of China, given that the world's second-largest economy is a key market for many of these companies. Stocks, however, ended the session mixed, with Porsche being a bright spot, ending up 2 percent.
A key part of China's pledge was to reduce industrial overcapacity. Metal prices have been under pressure this year due to concerns of oversupply from China and low demand. The news to cut the surplus boosted mining stocks. Steelmaker ArcelorMittal jumped to the top of European benchmarks, up over 6 percent, while Anglo American and Antofagasta also closed sharply higher, up 5.7 and 4.6 percent respectively.
"The positive opening call comes after Chinese leaders signaled more stimulus measures overnight with Chinese copper smelters Monday vowing to control their activities in support of prices," Accendo Markets analyst Augustin Eden, said in a note on Tuesday.
Spain's IBEX recovers
On Monday, Mariano Rajoy said his centre-right People's Party (PP) would talk to rivals in a bid to form a government after the inconclusive election outcome, but the left-wing parties told CNBC they would not want Rajoy to remain in power.
After closing over 3.5 percent lower on Monday due to political uncertainty, Spain's IBEX 35 index ended trade up 0.5 percent on Tuesday. Spanish banks tumbled on Monday following the news, but the sector reversed losses to post strong gains Tuesday, with Standard Chartered and Barclays ending higher. Spanish banks fluctuated in performance, as concerns lingered.
M&S under pressure
In individual stock news, French retailer Casino continued to come under pressure, down over 1.5 percent, just days after short-selling firm Muddy Waters called the company "one of the most overvalued and misunderstood companies". Casino has since rebutted the claims. But late on Monday, broker Raymond James cut its price target for the stock.
British retailer Marks and Spencer was at the bottom of London's FTSE, off 1 percent after Nomura cut its price target for the stock. Other British retailers came under pressure, including Tesco and Sainsburys on the back of this.