Spain's main stock market steadied Tuesday after falling heavily the previous day on the political impasse in the eurozone country following an inconclusive election.
Shares were largely higher across Europe, led by London, whose commodities-heavy index was boosted by more stable prices for oil and metals, traders said.
Around 1100 GMT, London's benchmark FTSE 100 index was up 0.6 percent from Monday's close.
In the eurozone, Frankfurt's DAX 30 was flat and the Paris CAC 40 edged up 0.1 percent.
Spain's IBEX 35 index gained 0.5 percent.
The Spanish market had slumped by 3.6 percent on Monday following an election that has left the eurozone's fourth-largest economy in political limbo with the ruling party losing its majority in parliament.
"It looks like Monday's Santa rally is tentatively set to continue," said Connor Campbell, analyst at Spreadex trading group.
In foreign exchange dealings on Tuesday, the euro advanced to $1.0934.
Hopes that China will implement fresh economic reforms lifted emerging-market currencies and oil and metals prices saw a rare uptick, while most Asian stock markets extended the previous day's gains.
After a secretive policy meeting that ended Monday, China's economic planners said they would combat local government debt and push on with changes in the housing sector to try to shore up growth.
They also said they would "strengthen structural reforms" and called for more flexibility in monetary policy, state news agency Xinhua reported.
The announcement is the latest from Beijing after it promised last year to let the market play a bigger role in the world's number two economy and implement reforms of bloated state-owned enterprises.
It also follows other moves to kickstart slowing growth, including six interest rate cuts since November last year.
"Somewhat mitigating the negative sentiment is talks that China will implement additional measures to support the domestic economy in the near future," said Markus Huber, a trader at City of London Markets.
"Furthermore with trading volume likely to decrease as the week progresses, trading ranges should somewhat narrow also."
- Key figures around 1100 GMT -
London - FTSE 100: UP 0.6 percent at 6,072.9 points from Monday's close.
Frankfurt - DAX 30: FLAT at 10,497
Paris - CAC 40: UP 0.1 percent at 4,570
EURO STOXX 50: UP 0.1 percent at 3,215.7
Tokyo - Nikkei 225: DOWN 0.2 percent at 18,886.70 (close)
New York - Dow: UP 0.7 percent at 17,251.62 (close)
Euro/dollar: UP at $1.0934 from $1.0915 late Monday
Dollar/yen: DOWN to 120.99 yen from 121.21 yen