Europe shares end higher on banks, energy stocks

European shares eked out a gain on Tuesday, as advances in banks and energy stocks offset falls in autos and drugmakers and a slide in Rio Tinto after BHP Billiton dumped a bid for the miner.

The FTSEurofirst 300 index of top European shares ended unofficially 0.3 percent higher at 831.25 points, after having traded in a wide range of 812.89 to 848.92.

The U.S. Federal Reserve announced a plan to buy billions of dollars worth of debt and mortgage-backed securities to loosen up the flow of credit for mortgages, loans for students, autos and credit cards.

"This is another in a series of significant measures over the past few weeks — slowly but surely they're starting to stabilise sentiment," said Darren Winder, head of macro and strategy research at Cazenove.

"But fundamentally markets are bumping along the bottom with high levels of volatility, and that pattern will continue. Falls in profit haven't fully taken their course," he said.

Banks and energy stocks added most points to the index. HSBC gained 6 percent and Credit Suisse jumped 11 percent, while BP gained 1.5 percent and BG Group rose 4 percent.

Rio Tinto plummeted 37 percent after BHP Billiton abandoned its bid for the group, while Novartis lost 4 percent and GlaxoSmithKline slipped 3.3 percent ahead of an EU report on Friday expected to criticise major European drugmakers for anti-competitive practices.

Volkswagen fell 23 percent, continuing its recent wild counter-index moves.