European equities advanced on Tuesday after Asian powerhouse China hinted that it could adopt stimulus measures to prevent a sharp economic slowdown, dealers said.
Markets were also boosted by unexpectedly weak housing data from the United States which increased the likelihood the Federal Reserve would keep its stimulus programme in place for some time, they added.
In early afternoon deals, London's FTSE 100 rose 0.21 percent to 6,636.79 points, as the birth of Britain's royal baby appeared to provide only slender support. Markets occasionally climb on the back of upbeat non-financial news.
Analysts at The Centre for Retail Research said that there would be a "baby boost" to the British retail sector in the region of £243 million ($372 million, 283 million euros).
Frankfurt's DAX 30 gained 0.20 percent to 8,346.51 points and in Paris the CAC 40 index of top companies added 0.15 percent to 3,945.79.
The Spanish market was the top performer, with the IBEX 35 index jumping 1.62 percent to 8,095.50 points after an upbeat short-term state bond auction that eased fears over the debt-ridden eurozone nation.
"European markets are ... relishing reassuring words coming out of mouth of the Chinese Premier, confirming that a slowdown in the world's second-largest economy will not be tolerated," said Gekko Markets trader Anita Paluch.
The news sent the mining sector soaring because China is a key consumer of metals, dealers said.
In London, shares in resource giant Glencore Xstrata rallied 4.11 percent to 367.3 pence, Anglo American jumped 4.09 percent to 280 pence and Fresnillo gained 2.73 percent to 1,093 pence.
In Paris, the price of shares in steelmaker Arcelor Mittal rose by 2.45 percent to 9.906 euros, while Germany's ThyssenKrupp added 1.12 percent to 17.14 euros.
Shares in industrial and media conglomerate Bouygues rose by 5.83 percent to 21.79 euros because its subsidiary Bouygues Telecom is in exclusive talks with SFR on sharing some mobile phone network infrastructure.
STMicroelectroncis stock fell 6.32 percent to 7.04 euros on a doubled-second-quarter loss to $152 million (115 million euros).
-- Chinese 'boost to risk appetite' --
In Asia, Hong Kong and Shanghai led the gains after China's premier hinted that the government had a lower limit below which it would not let economic growth fall.
Hong Kong's main stocks index soared 2.33 percent and Shanghai gained 1.95 percent, while Tokyo rose 0.82 percent, Seoul added 1.27 percent and Sydney advanced 0.30 percent.
China's Premier Li Keqiang was quoted in the Beijing News as saying: "The bottom line for economic growth is seven percent, and this bottom line must not be crossed."
The target was necessary to ensure China's goal of doubling gross domestic product between 2010 and 2020, he said.
"Comments from both Premier Li Keqiang and Vice Premier Zhang Gaoli overnight provided a real boost to risk appetite," said analyst Craig Erlam at trading firm Alpari in London.
"Vice Premier Zhang suggested that while the focus of the ruling party remains on reforms, they would support infrastructure and social welfare investments.
"This suggests that the ruling party is preparing to announce a new package of stimulus measures which should prevent a hard landing in China in the coming years."
Sentiment was bolster also by hopes that the Fed would delay winding down its bond-buying after more poor US data.
The National Association of Realtors on Monday said home sales fell 1.2 percent to an annual rate of 5.08 million in June, from a downwardly revised 5.15 million in May.
The average analyst estimate was for a rise to a 5.28 million pace in June.
In foreign exchange deals on Tuesday, the European single currency climbed to $1.3189 from $1.3186 late in New York on Monday.
The dollar firmed to 99.63 yen compared to 99.59, while sterling eased to $1.5353 from $1.5360.
On the London Bullion Market, the price of gold increased to $1,331.52 an ounce from $1,327 on Monday.