European shares managed to end a choppy session in positive territory and above 6-month lows on Tuesday as concerns about a likely clash in Europe over Italy's budget plans eased and heavyweight energy stocks lifted benchmarks. The pan-European STOXX 600 index rose 0.26 percent, bouncing back above its lowest level since April.
Germany's DAX and Britain's FTSE 100 were up 0.25 percent and 0.06 percent respectively while Milan's FTSE MIB made a strong comeback to end up 1.6 percent. European shares began the day in the black, mirroring a bounce in Chinese stocks, but the gains evaporated as Italian banks turned lower.
Yields in the Italian sovereign debt dropped in the afternoon after an address to parliament by Economy Minister Giovanni Tria, and helped the euro zone banking sector regain 0.9 percent.
Earlier on, the IMF cut its global economic growth forecasts for 2018 and 2019, saying that trade policy tensions and the imposition of import tariffs were taking a toll on commerce.
The oil and gas index was the biggest sectoral gainer, up 1.5 percent after crude prices rose as more evidence emerged that crude exports from Iran were falling.
Oil services firm SBM Offshore rose 6.9 percent after Kepler Cheuvreux upgraded the stock to buy, while Italian peers Saipem and Eni rose 3.3 and 2.6 percent respectively after the same broker raised their price targets.
Wirecard jumped 9.6 percent after the German fintech company said core profits would grow sixfold by the middle of the next decade on the back of a global boom in e-commerce and digital payments.
Elsewhere, RPC rose 2.6 percent after the plastic packaging maker gave two private equity firms that are considering rival takeover offers more time to make bids.
Earning updates were also in focus on Tuesday.
Analysts expect earnings of euro zone companies to have grown by 11.8 percent in the third quarter, nearly half the 21.5 percent expected for US companies listed on the S&P 500, according to Refinitiv IBES data.