In late morning deals, the Spanish capital's benchmark IBEX 35 index won one percent, having fizzed 2.44-percent higher the previous day.
London and Paris stocks each gained 0.1 percent while Frankfurt was closed for a German public holiday.
"Spanish stocks have enjoyed another leg higher today, with the IBEX 35 hitting its highest level since August as the Catalan independence push has seemingly lost its way," said analyst David Cheetham at trading firm XTB.
"After declaring independence on Friday, the former regional leaders have experienced a backlash with large protests against secession seen in Barcelona over the weekend and the imposition of direct rule from Madrid yesterday."
Catalonia's deposed separatist leader Carles Puigdemont was meanwhile set to hold a press conference in Brussels later Tuesday, members of the European Parliament said, a day after he arrived in Belgium as Spanish prosecutors demanded he be charged with rebellion.
Back in London the biggest gainer was chemicals group Croda International, whose share price rose three percent on upbeat third-quarter earnings.
Similarly, BP stock jumped two percent after the energy major logged a modest increase in third-quarter net profits, anchored by recovering oil prices.
In Paris, the top winner was top European planemaker Airbus. Stocks soared more than four percent after the aerospace giant logged rising third-quarter net profit and revenues.
Airbus warned however that investigations into fraud, bribery and corruption by the French and British authorities could impact earnings.
Ryanair shares jumped six percent as the Irish airline stuck to a full-year profits forecast despite cancelling thousands of flights on a pilot shortage.
- Asia muted -
Elsewhere on Tuesday, Asian markets were largely muted, tracking a retreat in New York as anticipation builds ahead of major earnings reports and a Federal Reserve policy meeting.
Hong Kong shed 0.3 percent, Tokyo and Shanghai were flat and Sydney lost 0.2 percent.
Investors are braced for a busy news week in the US, with President Donald Trump expected to say whether he will replace Federal Reserve chief Janet Yellen. The announcement is likely by Friday before he embarks on an Asian tour.
Traders are also keeping a close eye on the release of the October jobs report on Friday.
News of the first indictments over the FBI investigation into Russia's interference in the 2016 US presidential election have also sparked caution among investors.