European shares opened higher on Tuesday as a fresh whiff of optimism over the Sino-US trade dispute lifted sentiment after a burst of political risk and worries about global growth hit world markets during the previous session.

The euro zone STOXXE index was up 0.7 per cent at 0838 GMT with Germany's DAX, the most sensitive to China due to its big exporters, up 0.8 per cent. Earlier, Asian shares got a bounce after reports that Chinese and US trade officials spoke by phone, a sign that discussions between the world's top two economies continue even after the arrest of Huawei's CFO.

“Remember this isn't the first time these backroom negotiations have dangled a carrot in front of the markets,” said Oanda trader Stephen Innes.

“And while I view this development as a positively significant in the broader context, a trade war is far from over, and these are little more than a preliminary step in what should be a long and winding road fraught with peril,” he added.

France's CAC 40 was up 0.8 per cent after French president Emmanuel Macron had pledged late on Monday to raise the minimum wage and cut taxes in a bid to prevent more violent protests that have rocked the euro zone's second largest economy.

Britain's FTSE 100 was up 0.5 per cent with the pound stabilising after Monday's Brexit-related slide to 20-month lows after Prime Minister Theresa May postponed a key vote on how Britain will leave the European Union.

Among top performers was British advertising giant WPP , which rose 4.9 per cent after announcing plans to spend £300 million and cut 2,500 jobs - part of new boss Mark Read's plans to return the world's biggest advertising group to growth.

Shares in Ashtead jumped 6.4 per cent as the equipment rental firm said it expected full-year results ahead of expectations.

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