European stocks posted solid gains by Tuesday's close, as sentiment was buoyed by positive data out of the euro zone.
The pan-European STOXX 600 jumped 0.93 percent by the close provisionally, also supported by a positive trading session on Wall Street.
The euro zone economy accelerated marginally in August, according to Markit's euro zone composite purchasing managers' index (PMI), which came in at a seven-month high. The flash reading came in at 53.3, up from 53.2 in July.
Aside from data, investors are in wait-and-see mode ahead of a speech on Friday by U.S. Federal Reserve chair Janet Yellen at Jackson Hole.
Crude futures reversed losses to trade sharply higher in late European trade, after Reuters reported that Iran is sending positive signals that the producer may support joint action to prop up the market, citing sources in OPEC and the oil industry. At the close Brent and WTI were up more than 1 percent each, at $49.88 and $48.01 respectively.
Meanwhile, basic resources stocks got a boost after Jefferies said in a note that there are fundamental improvements in the mining sector with demand stabilizing and supply declining in several metals.
U.K. homebuilder Persimmon closed up 4.2 percent, after it said first-half profit rose 29 percent, helping push other names in the sector such as Taylor Wimpey, Bellway and Bovis Homes Group to close sharply higher.
Reuters reported that the chief executive of Polish insurer PZU is flying to Milan for talks to acquire Bank Pekao from Unicredit. Shares of the Italian bank rallied 6.6 percent. The news lifted several Italian banks, including Intesa Sanpaolo and Banco Popolare.
Renault closed near the bottom of the STOXX 600 after the Financial Times reported that the French government's report on the carmaker's emission probe left out crucial details.
However Volkswagen shares shot up 2.4 percent after it said the two auto parts suppliers, with which it had been locked in a contract dispute, had agreed to start delivering parts again and that production would resume, according to Reuters.