Europe's main stock markets mostly steadied on Tuesday as traders digested better-than-expected German investor sentiment data and awaited the start of an all-important US Federal Reserve policy meeting.
London's FTSE 100 index of leading shares climbed 0.68 percent to stand at 6,373.33 points in late morning deals. But Frankfurt's DAX 30 index edged up 0.03 percent to 8,217.85 points and in Paris the CAC 40 nudged down 0.03 percent to 3,862.38.
"European markets have continued to find support... with a small beat on the German ZEW survey propping up stocks," said Matt Basi, head of UK sales trading at CMC Markets.
"Most market chatter continues to centre on tomorrow's update from Fed Chairman (Ben) Bernanke" at the conclusion of the US central bank's two-day meeting, he added.
German investor sentiment rose slightly in June, on firming hopes for a gradual recovery in Europe's biggest economy in the second half of the year, the ZEW economic institute said on Tuesday.
Its closely watched index rose 2.1 points from May to 38.5. This was better than expected by analysts questioned by Dow Jones Newswires, who had forecast an index of 38.1.
"The financial market experts are sticking to their assessment: The German economy is likely to gain momentum in the second half of 2013," said ZEW president Clemens Fuest in a statement.
"The survey results indicate, however, that the economic recovery will proceed timidly. Almost half of respondents expect no significant economic impetus in the next half-year."
In foreign exchange deals on Tuesday, the European single currency rose to $1.3375 from $1.3367 late in New York on Monday.
The dollar increased to 95.20 yen from 94.46 yen on Monday.
On the London Bullion Market, the price of gold fell to $1,377.65 an ounce from $1,384.75 on Monday.
Investors were tracking closely also the bond markets amid worries over rising yields.
Spain's short-term borrowing costs climbed sharply on Tuesday as the Treasury raised 5.038 billion euros ($6.7 billion) in an auction of six- and 12-month bills, reflecting renewed investor concern over the ability of the recession-hit country to repay its debts.
The Treasury sold 1.087 billion euros' worth of six-month bills with an average yield of 0.821 percent, up from 0.492 percent from the last similar auction held on May 14.
Asian equity markets meanwhile mostly fell on Tuesday, with traders sitting on the sidelines as they await the Federal Reserve's plans for its stimulus programme.
Financial markets have been unsettled in recent weeks as investors speculate on whether the Fed will continue with its $85-billion-a-month quantitative easing programme, which helped to fuel a global stocks rally.
The Fed is expected to announce Wednesday after a two-day meeting when or if it intends to begin reeling in the huge bond-buying scheme as the economy shows signs of picking up.
A mixed bag of US data recently has pointed to an uncertain recovery with many analysts predicting the Fed would hold off cutting back on the purchases for the time being.
There were, however, some signs of strength in the world's biggest economy on Monday with a confidence index of US home builders hitting a seven-year high as they begin to see demand for new homes picking up pace.