Summary Asian stocks rose sharply on Tuesday, with Tokyo's Nikkei 225 index to closing up 0.83 percent.
LONDON (AFP) - Europe s main stock markets rose on Tuesday, extending the previous day s surge as easing tensions in Ukraine fuelled optimism ahead of a speech by the head of the US central bank this week.
London s benchmark FTSE 100 index climbed 0.51 percent to stand at 6,775.62 points in mid-afternoon deals.
Frankfurt s DAX 30 jumped 0.98 percent to 9,335.53 points and in Paris the CAC 40 index won 0.35 percent to 4,245.25 compared with Monday s close.
On the foreign exchange market, the euro fell against the dollar but rose versus the British pound.
European stock markets had rebounded sharply on Monday on easing investor concerns over the unrest in east Ukraine and Iraq while across the Atlantic, the Nasdaq 100 hit its highest level in 14 years.
The continued move higher "reflects investors improved sentiment as geopolitical risk subsides and the prospect of premature central bank tightening fades", said Craig Erlam, market analyst at Alpari traders.
World oil prices also rebounded, supported by investors seeking bargains after prices tumbled the previous day amid the easing conflicts in Ukraine and Iraq.
Traders were looking ahead to a speech on Friday by Federal Reserve chief Janet Yellen for any hint of a change to the US central bank s interest rate plans.
Last month, Yellen said that the Fed would hold its near-zero interest rate policy until the US economy strengthened, but may raise rates if the jobs market continues to improve.
Traders said tame US inflation, which rose a bare 0.1 percent in July despite strong gains in food costs according to official data, left the door open for the Fed to keep rates low.
US stocks opened higher on Tuesday following strong housing construction data and a solid earnings report from retailer Home Depot.
Five minutes into trade, the Dow Jones Industrial Average 0.27 percent to 16,883.63.
The broad-based S&P 500 gained 0.23 percent to 1,976.29, while the tech-rich Nasdaq Composite Index 0.17 percent to 4,515.82.
- BHP Billiton splits -
The top corporate story was the world s biggest miner BHP Billiton, which posted a 23.2-percent jump in annual net profit and said it would spin off non-core assets to cut costs and boost output.
Shares slumped 4.62 percent to 1,971.50 pence in London as it unveiled plans to demerge parts of its business to focus exclusively on its core operations: iron ore, copper, petroleum, coal and potash.
Traders said rumours of the separation had previously supported the share price and that Tuesday s drop was down to profit-taking.
Shares in Maersk jumped 5.19 percent after the world s largest container-shipping line raised its full-year profit forecast.
Imperial Tobacco, which makes Davidoff and Gauloises cigarettes, gained 2.14 percent after reporting a smaller fall in sales than expected by analysts.
On foreign exchange markets, the euro fell to $1.3324 from $1.3363 late on Monday in New York.
The European single currency increased to 80.13 pence from 79.88 pence on Monday, while the pound slid to $1.6618 from $1.6728.
The pound came under pressure on news of a dip in inflation in Britain, which eased the pressure on the Bank of England to raise its main interest rate more than five years after it was cut to the current record-low of 0.50 percent.
Markets still expect the BoE to raise borrowing costs in the first half of 2015, if not before, as Britain s economy is achieving solid growth in comparison to many of its eurozone neighbours.
Asian stocks rose sharply on Tuesday, with Tokyo s Nikkei 225 index to closing up 0.83 percent. The Japanese benchmark index benefited also from a weaker yen, which helps to boost Japanese companies exports.
Elsewhere on Tuesday, the price of gold rose to $1,300.25 an ounce from $1,296.75 on Monday on the London Bullion Market.
