European stock markets are trading higher on Tuesday as sentiment in the region's banking sector improved following a massive capital-raising announcement from Italy's biggest bank.

Europe's leading Blue-chip index, EURO STOXX 50 went up 13.50 points or 0.42 percent to trade at 3,212.61. Germany's benchmark index DAX gained 49.49 points or 0.44 percent to trade at 11,239.70.
Meanwhile, French benchmark index CAC 40 gained 10.04 points or 0.21 percent to trade at 4,770.81.

On the other hand, UK's benchmark index FTSE 100 lost 0.72 points or 0.01 percent to trade at 6,889.70.

On Monday, European stock markets settled lower. UK's benchmark index FTSE 100 fell 63.79 points or 0.92 percent to close at 6,890.42. Germany's benchmark index DAX lost 13.42 points or 0.12 percent to end at 11,190.21. French benchmark index CAC 40 declined 3.30 points or 0.07 percent to end at 4,760.77.