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Europe ends sharply higher despite China data; Barclays slides 8%

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European markets posted strong gains by Tuesday's close as investors shrugged off a survey showing another slump in China's manufacturing sector, and focused on individual corporate news.

China data

European Markets: FTSE, GDAXI, FCHI, IBEX

The STOXX 600 closed up some 1.4 percent provisionally, despite opening in the red. The FTSE 100 hit a near two-month high on Tuesday, finishing trade up 0.9 percent. France's CAC 40 ended 1.2 percent higher, while Germany's DAX jumped ahead of its counterparts, finishing up 2.3 percent.

In markets overseas, U.S. stocks traded sharply higher on Tuesday, as investors cheered a better-than-expected ISM manufacturing report.

Asia markets closed mostly higher following a Chinese government survey which showed activity in large factories contracted for the seventh straight month in February. The official manufacturing Purchasing Managers' Index (PMI) was at 49.0, lower than the market's forecast of 49.3.

Oil in focus

In the oil sector, prices seesawed during most of Tuesday's trade, however crude prices turned higher on hopes of a bottom in oil and the surprise monetary policy easing from China.

Global oil prices appear to have bottomed out and are expected to rise through 2016 as investment cuts help to reduce a supply glut, Neil Atkinson, the new head of IEA's oil industry and market division, told a seminar in Oslo.

At Europe's close, international benchmark Brent pared earlier losses, trading higher around $36.73, while U.S. crude jumped almost 1.5 percent to $34.18. Stocks closed in the green, with Seadrill finishing up over 4.5 percent.

Barclays slumps 8 percent

On the earnings front, British bank Barclays reported a fall in statutory pre-tax profit in 2015 to £2.1 billion ($2.9 billion) and announced it is looking to sell down its 62.3 percent holding in its African business. Shares in the British lender tumbled over 8 percent by the close.

The overall banking sector came off session lows to finish in the green, yet there are still issues around Europe's lenders. Concerns about the bad loan portfolio of some banks has caused a sell-off in the sector in the past couple of months, with analysts saying the low interest rate environment is hitting lenders globally.

"I think that the biggest risk to banks is not even a localized one…it's a global and it has got to do with deflationary pressures, secular stagnation I very much buy into those theories, " Francesco Filia, chief executive of Fasanara Capital, told CNBC on Tuesday.

Miners rally

Miner Glencore reported a 32 percent slump in full-year core earnings to $8.7 billion hit by the fall in commodity prices. Shares were initially higher on the back of the RRR cut news and a rise in metal prices, however, shares closed down some 2 percent.

The recovery in metal prices helped the likes of Arcelormittal and Anglo American push higher, both closing higher, over 8 and 2 percent respectively.

Fresnillo however slipped, closing sharply down over 6 percent after the precious metals miner said full-year net profit fell to $70.5 million for the year ended December 31, down from $108.5 million a year earlier. Silver prices were also in the red on Tuesday.

LSE surges on rival offer

In other news, shares in the London Stock Exchange Group surged over 7 percent on a statement from the Intercontinental Exchange saying it is considering making an offer for the LSE.

Autos were some of the biggest gainers, closing up some 3 percent as a sector, after the euro hit a one month low against the dollar. Unemployment in the euro zone fell slightly in January, coming in at 10.3 percent, down from 10.4 percent the month before.

Elsewhere on the data front, U.K. manufacturing activity slumped to a near three-year low in February, according to a closely watched survey. The Markit/CIPS manufacturing Purchasing Managers' Index (PMI) fell to 50.8 last month from 52.9 in January.

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