European shares closed mixed on Tuesday, with upward momentum coming from the basic resources sector. Miners in particular rose on better-than-expected results from aluminum producer Alcoa, which kicked off the first quarter earning season on Monday. In addition, benign Chinese inflation data raised hopes of further monetary easing by Beijing.
Investors remained cautious however, with earnings season forecast to be fairly weak. Earnings growth of just 1.6 percent is expected for the first quarter, compared with 6.2 percent for the last, according to Reuters data. Furthermore, the ratio of positive-to-negative warnings for S&P 500 companies is the worst in 12 years, with 108 downward revisions and only 23 upward revisions.
(Read More: Earnings Season Could Bring 'April Anxiety')
The pan-European FTSEurofirst 300 closed unofficially 0.1 percent lower on Tuesday at 1,163.61 points, retreating from a high of 1,172.07 after a tepid Wall Street open.
France's budget and trade deficit widened in February, according to data out on Tuesday, while its central bank said economic growth was just 0.1 percent in the first quarter. Meanwhile, Germany's import and export numbers slumped in February, raising concerns about growth. The German Dax closed unofficially down 0.5 percent.
However, U.K. industrial output for February was better than expected, rising 1 percent over the previous month. London's FTSE 100 provisionally closed 0.5 percent higher.
(Read More: Why Only Obama Can Save Europe Now)
HSBC cuts it rating on European shares, excluding the U.K., to underweight on Tuesday, citing more compelling valuations in the U.S. and less supportive monetary policy in Europe.