European stocks closed higher Tuesday, as China said it would reduce tariffs on cars and auto parts and pressure on Italian markets eased.
The pan-European Stoxx 600 closed up 0.27 percent, with most sectors and major bourses in positive territory.
Italian government bond yields came off 14-month highs on Tuesday, after several days of heavy selling amid concerns about a potential new governing coalition. The proposed link-up of anti-establishment parties had lifted Rome's 10-year yields up nearly 70 points since the start of the month.
Autos were among those to lead the gains, up almost 1 percent after China's Finance Ministry said it would cut the import duty on passenger cars to 15 percent from current levels of 25 percent. The announcement, which came Tuesday, also said tariffs on some automotive parts would fall to 6 percent. Schaeffler and BMW were trading more than 2.5 percent higher following the news.
Telecoms stocks were also among Europe's top performers after the chief of France's telecoms regulator told Le Monde that he was open to consolidation in the sector, re-igniting talk of telecom deals. Altice rose to the top of the sector, up more than 19 percent.
Looking at individual stocks, Fischer surged near the top of the European benchmark after UBS upgraded its stock recommendation to a "buy." Its shares were more than 7 percent higher.
On Wall Street, stocks opened higher, building on strong gains from the previous session.
Meanwhile, surging oil prices ignited market participants' concerns about a flare-up in inflation and faster-than-expected U.S. interest rate increases.
Oil prices rose amid concerns over Venezuela's crude output following a disputed presidential vote. Brent crude traded at $80.40 a barrel, up more than 1 percent, while WTI stood at $72.67, over 0.6 percent higher.
Bank of England Governor Mark Carney said the U.K. economy would bounce back from a weak start to the year. He denied claims that the central bank had confused investors and households by deciding not to hike interest rates earlier this month.