Paris Lost 0.16%, Frankfurt Gained 0.6% and London Rose 0.29%.

European stock markets closed mostly higher in a volatile, summer-thinned session on Tuesday, with Milan's FTSE MIB edging up 0.34% as investors kept a close eye on the banking sector. Paris slipped 0.16%, Frankfurt gained 0.6% and London rose 0.29%. Falling oil prices, which eased some inflationary pressures, supported the rally along with press reports suggesting the United States could repatriate its diplomats in the Middle East as early as this week.

In Milan, attention was focused on banks, though there were no fireworks as the market waits for all the players to show their hands. Banco Bpm, which has so far only acknowledged the takeover offer from Mps, fell 0.49%, while Banca Generali, the other target, rose 0.3% and Generali gained 0.5%. Mps added 0.48% and Intesa Sanpaolo rose 0.31%.

Among the worst performers were Eni (-1.15%) and luxury stocks Moncler (-2.2%) and Cucinelli (-1.89%). Prysmian (+2.8%) and Tenaris (+3.74%) were the standout gainers. Trading volumes remained thin in the August lull.