European shares edged higher on Tuesday after the United States temporarily eased restrictions on China's Huawei, easing trade tensions and lifting tariff-sensitive tech and auto stocks, while the banking sector also gained.
The pan-European STOXX 600 index was up 0.4pc by 0745 GMT, with the trade-sensitive DAX outperforming after the US Commerce Department said it would allow Huawei Technologies to purchase American-made goods.
The news came as a major relief to markets and lifted European chipmakers, which had tumbled after reports suggested they may pause shipments to the Chinese telecoms tech giant. The tech sector rose over 1pc after losing almost 3pc on Monday.
Auto stocks were around 0.4 percent higher, with Daimler giving an additional boost after German newspaper Handelsblatt reported the company was looking to cut administration costs by 20pc.
The banking index, which closed at a more-than three-month low in the previous session, climbed 0.7pc
As earnings season nears its end, fewer companies are reporting.
Italy's biggest phone group Telecom Italia led gainers on the STOXX 600 after posting first-quarter earnings in-line with expectations and confirming its guidance for the next three years.
Swiss hearing aid maker Sonova reported an increase in full-year sales, sending its shares up 4pc.
Norsk Hydro rose 5.4pc after Brazil gave the go ahead for the company's Alunorte alumina plant to reopen.
Struggling Spanish retailer DIA jumped 5pc after reaching an eleventh-hour agreement to secure financing, staving off the imminent risk of having to start insolvency proceedings.
Defensive stocks - including real estate, utilities and telecoms - underperformed.
But investors remained cautious as the sudden about-turn in China-US talks over the last two weeks shattered confidence in a speedy truce to the trade war that has roiled financial markets for a year.
European equities have outperformed Wall Street since the tariff war re-intensified on May 9, with the STOXX 600 rising 0.4pc but the US benchmark S&P 500 index losing almost 1pc during the same period.
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