European equities advanced on Tuesday after a string of US companies posted better-than-expected profits and Asian powerhouse China hinted 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 afternoon deals, London's FTSE 100 rose 0.23 percent to 6,638.22 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 0.23 percent to 8,350.43 points and in Paris the CAC 40 index of top companies added 0.13 percent to 3,944.85.
The Spanish market was the top performer, with the IBEX 35 index jumping 1.89 percent to 8,116.50 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 the 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.
Chinese Premier Li Keqiang was quoted by a state-backed newspaper saying that the "bottom line for economic growth is seven percent".
The remarks were interpreted by analysts as a hint that Beijing would move to prop up growth.
The news also sent the mining sector soaring because China is a key consumer of metals, dealers said.
In London, shares in resource giant Glencore Xstrata rallied 4.59 percent to 281.35 pence, Anglo American jumped 2.21 percent to 1,436 pence and Fresnillo gained 2.16 percent to 1,087 pence.
Shares in industrial and media conglomerate Bouygues rose by 6.85 percent to 22.00 euros because its subsidiary Bouygues Telecom is in exclusive talks with SFR on sharing some mobile phone network infrastructure.
STMicroelectronics stock however plunged 8.07 percent to 6.91 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 on the back of Li's remarks.
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.
Analyst Craig Erlam at trading firm Alpari in London said Li's comments suggest "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 bolstered 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.
US stocks also rose, boosted by better-than-expected earnings from leading companies such as Dow components DuPont, United Technologies and Travelers.
Five minutes after the opening bell, the Dow Jones Industrial Average jumped 0.33 percent, the broad-based S&P 500 rose 0.14 percent and the tech-rich Nasdaq Composite Index added 0.13 percent.
In foreign exchange deals on Tuesday, the European single currency climbed to $1.3188 from $1.3186 late in New York on Monday.
The dollar firmed to 100.04 yen compared to 99.59 yen, while sterling eased to $1.5341 from $1.5360.
On the London Bullion Market, the price of gold increased to $1,326.75 an ounce from $1,327 on Monday.