Europe close: Stocks rebound, but Ibex dragged lower by Argentine peso

Stocks rebounded on Tuesday as investors waited on the US central bank's policy decision due the next day and as officials in Beijing struck a more emollient tone.

Overnight, Wang Shouwen, China's vice commerce minister, said his country was open to trade talks but that Washington had to show sincerity and not put a knife at Beijing's throat.

Traders were also keeping an eye on the recent rise in crude oil prices.

"The FTSE 100 is the standout performer in Europe thanks to the benchmark’s relatively high exposure to energy and mining stocks. Royal Dutch Shell and BP have helped the British index due to the rally in the underling oil market," said David Madden at CMC Markets UK.

"Brent crude oil reached its highest level in four years as dealers are concerned about supply, and energy stocks are in high demand on the back of it. Eurozone stocks are mixed this afternoon after a small recovery from yesterday’s negative move, investors are still cautious about the US-China trade dispute."

By the end of trading, the benchmark Stoxx 600 was ahead by 0.46% or 1.75 points at 383.89, alongside a rise of 0.19% or 23.84 points to 12,374.66 for the German Dax and a gain of 0.05% or 2.93 points to 5,479.10 for the Cac-40.

Spain's Ibex 35 on the other hand finished 0.20% or 19.20 points lower to 9,493.60, weighed down by a drop sharp drop in the Argentinian peso after its recently-minted central bank chief, Luis Caputo, decided to stand down, albeit for personal reasons.

In parallel meanwhile, euro/dollar was advancing 0.21% to 1.17730 and front month Brent crude oil futures were up by 0.84% to $81.89 a barrel on the ICE.

Against that backdrop, the Stoxx 600 sector gauge for Oil&Gas was up by 1.76% at 361.42.

The economic calendar was very light, although a speech by European Central Bank chief economist, Peter Praet, did catch economists' attention.

Playing down remarks from ECB chief Mario Draghi the day before, according to Praet, the anticipated pace of monetary tightening had not changed since June.

"There was nothing new [in Draghi's speech] Clearly, we see progress in underlying (prices), what is behind the inflation process. But it’s a long process and conditioned on very easy monetary conditions," Praet said.

Significantly, two days before Praet's remarks in London, Austrian central bank governor, Ewald Nowotny, had urged a quicker pace of tightening.

Elsewhere, INSEE did report a small improvement in its French business climate index, which it said had risen from a reading of 102.0 for July to 104.0 in September.