Europe's main stock markets mostly rose on Tuesday despite news of falling German investor confidence, as investors awaited US Federal Reserve Chairman Ben Bernanke's appearance before Congress.
London's FTSE 100 benchmark index of leading shares fell 0.39 percent to 5,640.91 points, but Frankfurt's DAX 30 index added 0.34 percent to 6,587.84 points and in Paris the CAC 40 won 0.36 percent to 3,191.27
Madrid rallied by 0.94 percent and Rome added 0.17 percent, despite news that Moody's ratings agency has downgraded 13 Italian lenders.
In foreign exchange deals, the European single currency increased to $1.2315, from $1.2271 late in New York on Monday.
German investor confidence fell for the third month in a row in July as the eurozone debt crisis hurt exports, a new survey showed on Tuesday.
The ZEW think tank's economic expectations index declined by 2.7 points to minus 19.6 points, fanning concerns about the health of the eurozone's biggest economy.
However, financial markets remain on tenterhooks ahead of Bernanke's appearance before the Senate Banking Committee later today.
"Equities are ... carrying on the positive tone from Asian Pacific markets overnight," said GFT Markets analyst Fawad Razaqzada.
"Investors have become fixated by every utterance from the Fed Chairman and today's appearance has taken on added importance.
"This is because last week's minutes indicated that the Fed was prepared to take further stimulative action, but lacked detail as to what the trigger for further action might be."
Minutes from the Federal Reserve's June policy meeting showed last week that policymakers were split on how, when and if to provide more stimulus.
"There is plenty of optimism ... that Fed Chairman Bernanke will deliver a promise of further policy accommodation during his semi-annual address to Congress today," added Rabobank analyst Jane Foley.
In company news, shares in Rio Tinto sank 1.96 percent to 2,927.38 pence after the mining giant warned of significantly weakening global economic conditions. But it also posted record iron ore production and strong steelmaking coal output in the first half of 2012.
British plumbing and heating company Wolseley saw its share price slump 3.44 percent to 2,248 pence, after announcing a strategic review of its French business amid difficult trade in Europe.
Despite broader gains in Paris, Alcatel-Lucent stock tumbled 15.08 percent to 0.963 euros after warning that it no longer expects to post a stronger operating margin this year.
The French telecommunications equipment maker also posted a provisional second-quarter adjusted operating loss of around 40 million euros, compared with a profit of 108 million euros in the same period a year earlier.
Elsewhere, Asian shares gained ground on Tuesday, led by a sharp rise in Hong Kong, amid hopes of Chinese and US stimulus measures.
Hong Kong's benchmark Hang Seng Index closed up 1.75 percent, while the Shanghai Composite Index rose 0.62 percent on bargain-hunting after hitting a three-year low on Monday.
Tokyo climbed 0.35 percent, while Sydney rose 0.87 percent and Seoul was up 0.23 percent.
Beijing said last week its economic growth slowed to the lowest level in more than three years to 7.6 percent year-on-year for the second quarter.
The news has sparked fresh speculation of more stimulus measures to bolster the Chinese economy.