This was CNBC's live blog covering European markets.

European markets closed higher on Tuesday as investors continued to assess the scope and breadth of U.S. President Donald Trump's trade tariffs.

The pan-European Stoxx 600 index closed 0.67% higher, with most sectors and all major bourses in positive territory.

Germany's DAX led regional gains, up 1.13%, after a survey showed improved business sentiment in the conuntry. German biotech firm Bayer rose more than 5%, recovering from a 7% loss in the previous session after announcing over the weekend that it had been ordered by a U.S. court to pay $2.1 billion in damages relating to its Roundup weed killer.

German software giant SAP meanwhile extended its newly-held position as Europe's most valuable company, up 1.3%. The company on Monday overtook Denmark's Novo Nordisk in market capitalization, as investors bet on its ability to boost revenue amid the AI boom.

Elsewhere, British oil major Shell gained 1.5% after announcing plans to boost investor returns, cut spending and double down on its liquified natural gas (LNG) push.

The autos sector ended 0.6% higher after Trump announced plans on Monday to implement tariffs on automobiles and a host of other sectors including the pharmaceuticals, lumber, and semiconductor industries.

Asia-Pacific markets traded mixed on Tuesday, while U.S. stocks opened slightly higher after the three key Wall Street indexes logged gains on Monday.

Wall Street remains on edge over a potential uptick in inflation and slowing economic growth as it awaits reciprocal tariffs from the Trump administration on April 2.

— CNBC's Hakyung Kim contributed to this market report.

Europe stocks close higher

European markets regained some positive momentum Tuesday, with the Stoxx 600 provisionally closing 0.72% higher after three sessions in the red.

After a strong start to the year, European stocks have stumbled in March and are on course for a monthly loss.

Germany's DAX and France's CAC 40 both ended around 1.1% higher Tuesday, as the U.K.'s FTSE 100 rose 0.3%.

— Jenni Reid

Volkswagen caught in the crosshairs of tariffs, cost-cutting and Chinese competition

Annette Weisbach reports from Volkswagen's headquarters, where she speaks to Arno Antlitz, CFO of Volkswagen.

Cathie Wood stands by Tesla, predicts stock could soar nearly 10 times current price

In an interview with Bloomberg TV, Ark Invest CEO and CIO Cathie Wood said that she remained optimistic on shares of Tesla.

In five years' time, Wood believes that Tesla stock could trade at $2,600 per share. That's an 834% upside from the stock's Monday closing price of $278.39.

While Tesla shares added 12% on Monday — marking their best daily performance this year — the stock is still down more than 44% from its December all-time high.

But Wood predicted that Tesla's robo taxis will drive most of its share growth in the next five years. Investors have grown more afraid that Chinese competitor BYD could place mounting pressures on Tesla, especially in the Chinese market, a fear that Wood dismissed.

"If you look at metrics like range and power for a given price, Tesla is very competitive, if not the most competitive, depending on the model of car," she said. "Tesla and BYD are both in the lead from an EV point of view alone. If you are layering in robotaxi, of course BYD is not seizing the moment there, at least not yet."

— Lisa Kailai Han

German 10-year bund yield rises amid improved business sentiment

German Bunds rose slightly after the IFO Institute published its Business Climate Index showing a more optimistic sentiment.

Germany's 10-year Bund yield was up more than 4 basis points to 2.817% on Tuesday morning after Germany's Business Climate Index increased to 86.7 points in March, up from 85.3 points in February.

The index recorded a significant increase in sentiment in the manufacturing sector where there was decreased scepticism and increased satisfaction, according to a Tuesday statement from the IFO Institute.

Optimism also picked up in the service, architectural, engineering, and trade sectors. Although the business climate brightened in the construction industry, expectations remained skeptical with a lack of orders remaining the greatest challenge for the sector.

"The Ifo Business Climate Index (BCI) and other surveys for March confirm that the prospect of fiscal stimulus is boosting sentiment in Germany and outweighing concerns about US tariffs for now," Franziska Palmas, senior Europe economist at Capital Economics said in a note.

"However, sentiment could take a renewed downturn depending on how harshly Germany is hit by new U.S. tariffs announced on 1^st April."

— Sawdah Bhaimiya

B&Q owner Kingfisher slides 11% after annual profit falls

British home improvement giant Kingfisher fell to the bottom of the Stoxx 600 shedding 11% after reporting a 7% drop in annual profit.

The B&Q and Screwfix owner saw its adjusted pre-tax profit fall 7% to £528 million ($682.4 million) in 2024. Adjusted retail profit also fell 7% to £696 million, down from £749 million the previous year. Sales declined 1.5% to £12.8 billion.

The company pinned the decline in sales and profit on weakened consumer demand. Its outlook for 2025 is the same as the previous year, forecasting an annual adjusted pre-tax profit within the range of £480 million to £540 million.

"Looking to the year ahead, the recent government budgets in the UK and France have raised costs for retailers and impacted consumer sentiment in the near term," CEO Thierry Garnier said. "With this in mind, we remain focused on what is in our control – progressing our strategic objectives at pace to deliver further market share gains, and continuing to manage gross margin, costs and cash effectively."

— Sawdah Bhaimiya

Oil major Shell vows to boost investor returns, doubles down on LNG push

British oil major Shell on Tuesday announced plans to increase shareholder returns and cut spend, as it doubles down on its liquified natural gas (LNG) push.

In an announcement ahead of its Capital Markets Day 2025 event, the company said it would bolster shareholder distributions to 40-50% of cash flow from operations, up from a 30-40% range previously. It intends to stick to progressive dividends of 4% per year and to grow free cash flow per share by more than a yearly 10% through to 2030.

The oil major also said it will lower its spending to $20-22 billion per year through to 2028, after targeting such costs in a $22-25 billion range for 2024 and 2025 back in 2023.

The oil company separately said it aims to trim its structural cost reduction target from $2-3 billion by the end of this year to a cumulative $5-7 billion by the end of the three-year stretch to the end of 2028, compared with 2022 plans.

Read the full story here.

— Ruxandra Lordache

UK finance minister to reveal Britain's growth will halve in 2025, FT reports

U.K. Finance Minister Rachel Reeves will share a forecast from the country's Office for Budget Responsibility (OBR), which is expected to show that the country's economic growth will approximately halve in 2025, the Financial Times reported.

Reeves will deliver the Spring Statement on Wednesday, an annual speech made by the Chancellor of the Exchequer, providing an update on the health of the U.K. economy and OBR's forecasts.

The OBR is projecting that Britain's growth will reduce from 2% to about 1% in 2025, according to the FT report. The Spring Statement is expected to show that Reeves' £9.9 billion ($12.8 billion) fiscal buffer is gone, leaving her in a £4 billion deficit, sources familiar with the matter told the FT.

Reeves will also publish a government impact assessment of her £5 billion cuts to welfare spending and is expected to implement a further £5 billion cut to public spending.

A HM Treasury spokesperson told CNBC in an emailed statement that it doesn't comment on speculation around OBR's forecast.

"The Chancellor has also been clear that she would not repeat the likes of the October Budget and is now focused on growing the economy and rooting out waste in public spending through the Spending Review," they added.

— Sawdah Bhaimiya

European markets: Here are the opening calls

European markets are expected to open in negative territory Tuesday.

The U.K.'s FTSE 100 index is expected to open 23 points lower at 8,617, Germany's DAX down 50 points at 22,804, France's CAC 11 points lower at 8,009 and Italy's FTSE MIB 78 points lower at 38,207, according to data from IG. 

Earnings come from Kingfisher and Smiths Group. On the data front, Germany's Ifo Institute releases its latest business climate survey.

— Holly Ellyatt