After a mixed start, Europe's STOXX 600, Germany's DAX and Britain's FTSE 100 all got a mid-afternoon boost from a report the United States and China were seeking to restart talks to defuse the trade war.
Trade-sensitive mining and materials stocks <.SXPP> led the modest rally, up 1.2 percent, while autos stocks <.SXAP> remained down 0.1 percent in an ambivalent reaction by investors to the latest developments in the trade war saga.
Tech stocks <.SX8P> were notable underperformers, down 0.4 percent and tracking overnight declines in U.S. and Asian peers.
Earnings drove the market with big moves from GAM, Travis Perkins, Lufthansa and Vivendi.
Credit Suisse shares rose 1.1 percent after the Swiss lender doubled its second-quarter profit but rival Standard Chartered fell 1.3 percent after its half-year update.
German airline Lufthansa was a top gainer, jumping 8.8 percent after its second-quarter operating income beat estimates.
Shares in French media conglomerate Vivendi gained 4 percent after it reported results and said it was considering selling up to half of its Universal music division.
"The results support our positive view on the structural growth of music streaming, self-help at Canal+ as well as value crystallisation opportunities," Goldman Sachs analysts said.
Top of the STOXX was Italian aerospace and defence firm Leonardo, which surged 10.6 percent after upping its 2018 revenue and free cashflow outlook, saying its helicopter unit was recovering.
It helped Italy's FTSE MIB rise 1.3 percent, outperforming peers.
Meanwhile Swiss asset manager GAM dropped 12.6 percent after it suspended its investment director following an internal investigation and reported results.
Barclays European equity strategists said European second quarter results were "reassuring" and they expected European equities to fare better into the year-end.
"Europe still lacks self-help, it remains hostage to messy politics and is thus overly dependent on the fate of the global cycle. The region is unlikely to decouple, but it is making slow progress on structural reforms," strategists at Barclays said.
"We believe the positives outweigh the negatives and are overweight equities for now. But risks are mainly tilted to the downside, which warrants a balanced risk allocation within our portfolio," they added. They prefer UK to euro zone equities.
So far this earnings season, half MSCI EMU companies have beaten analysts' expectations, with reported actual year-on-year earnings growth clocking in at 8.6 percent, according to I/B/E/S data.
BP shares gained 0.7 percent after the oil major's second-quarter profit beat expectations on the back of higher oil prices and increased output.
Along with BP, Lundin Petroleum helped boost Europe's energy index <.SXEP> up 1.5 percent. The Swedish independent oil firm rose around 7 percent after its second-quarter core profit beat expectations and its costs fell.
Among biggest fallers, British building materials supplier Travis Perkins tumbled more than 10 percent and was one of the worst STOXX 600 performers after it cut its profit outlook due to a weak DIY market.
(Reporting by Kit Rees and Helen Reid; Editing by Alison Williams)
By Kit Rees and Helen Reid
