European shares gained on Tuesday as a slate of strong earnings reports from UBS, ABB and Novartis outweighed a slump in oil prices and shares of Wirecard, with investors also focusing on signs that several economies were starting to reopen.

The pan-European STOXX 600 held at a near seven-week high with a 0.7 per cent gain, while Europe's battered banking sector was boosted by a 40 per cent jump in first-quarter profit for UBS, the world's largest wealth manager.

UK-based HSBC Holdings Plc slipped 1 per cent as it warned of more earnings pain ahead as it set aside a hefty $3 billion in bad loan provisions due to the pandemic, while Spain's Santander was flat after an 82 per cent slump in quarterly net profit.

“We've come to a point with regard to European banks where expectations have fallen so much because of the uncertainty, but the earnings look stable excluding the loan loss provisions,” said Craig Erlam, senior market analyst, Oanda.

“It's a huge week for earnings, and another milestone that we need pass in order to continue to put a floor beneath prices in equity markets.”

Companies listed on the STOXX 600 are expected to report a near 25 per cent decline in first-quarter profits, according to Refinitiv data.

On Wall Street, all eyes will be on reports from heavyweights such as Apple and this week.

Swiss stock index, home to many defensive names, got a boost from a 5 per cent jump in ABB after the engineering company reported first-quarter results that beat market expectations.

Drugmaker Novartis edged up 0.6 per cent after it confirmed its 2020 targets, while rival Roche Holding gained 1 per cent after revealing that risdiplam showed significant improvement in survival in a clinical trial for infants with type 1 spinal muscular atrophy.

European stocks have recovered more than 25 per cent from mid-March lows, following unprecedented measures from major central banks and governments to support the global economy and, more recently, on signs that many countries plan to restart their economies.

Europe's oil & gas sector lagged as oil prices sank on concerns about dwindling crude storage capacity worldwide.

London-based BP slipped 1.5 per cent as it forecast significantly lower refining margins in the second quarter and its first-quarter profits tumbled by two-thirds as the health crisis hammered oil demand.

German financial services company Wirecard plunged 16 per cent after an investigation by auditor KPMG delivered no evidence of suspect balance sheets but the company delayed filing its annual report.

“It is clear that KPMG still has work to do, many questions remain and the report does not give Wirecard the clean bill of health it hoped to receive,” Neil Campling of Mirabaud Securities wrote in a note.