- European stocks were higher on Tuesday, as markets eyed the release of key German economic sentiment data later in the day, as well as a string of fresh earnings reports.

During European morning trade, the EURO STOXX 50 gained 0.38%, France’s CAC 40 edged up 0.08%, while Germany’s DAX 30 added 0.21%.

Investors still remained cautious amid expectations for a reduction to the Federal Reserve''s quantitative easing program at the outcome of its next policy meeting on January 29 to USD65 billion from the current USD75 billion.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale jumped 1.93% and 0.70%, while Germany''s Deutsche Bank climbed 0.62%.

Among peripheral lenders, Spanish banks Banco Santander and BBVA dropped 0.44% and 0.73% respectively, while Italy''s Intesa Sanpaolo and Unicredit declined 0.64% and 0.71%.

Elsewhere, SAP plummeted 2.38% after the German maker of business-management software said it pushed back its profitability target by two years as it shifts sales efforts from traditional license business to programs delivered over the Internet.

Alstom saw shares dive 12.56% after the French transport company reduced its outlook and posted quarterly sales below expectations.

Meanwhile, French automaker Peugeot Citroen, up 2.45%, confirmed that it is pursuing negotiations with China''s Dongfeng Motor about taking a stake as part of a possible capital increase of around EUR3 billion.

In London, FTSE 100 edged up 0.12%, led by a 4.25% surge in Unilever shares after the company said fourth-quarter sales rose 4.1%, beating analysts'' expectations

Adding to gains, U.K. lenders Barclays and HSBC Holdings added 0.11% and 0.33% respectively, while the Royal Bank of Scotland climbed 0.67% and Lloyds Banking advanced 0.87%.

In the mining sector however, stocks were trading broadly lower. Glencore Xstrata saw shares drop 0.60% and BHP Billiton declined 0.58%, while rivals Randgold Resources and Rio Tinto tumbled 1.22% and 1.26% respectively.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.32% increase, S&P 500 futures signaled a 0.27% rise, while the Nasdaq 100 futures indicated a 0.47% climb.

Later in the day, the ZEW Institute was to release its closely watched report on German economic sentiment.

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