European stock markets were higher on Tuesday, supported by gains among bank and auto stocks, as investors forged on undeterred by the latest terrorist attacks in Europe.

The banking sector across Europe had weakened on Monday due to renewed concerns over the stability of Italian banks, with Deutsche Bank (DB) - Get Report hit particularly hard as rumors circulated during the session that a settlement with the DoJ could be near.

However, the continent's financial titans recovered Tuesday, aided by speculation that the Italian government is planning a rescue of the Mediterranean nation's banking system.

Autos gained after industry data confirmed that European demand remained healthy during November, with noteworthy growth in Germany, Italy and the U.K.

Unsurprisingly, airline stocks were the weak link, as overnight events in Germany led to renewed concerns over the outlook for European tourism.

The FTSE 100 in London traded just more than 0.2% higher, at 7,035, during the final moments of the session while the mid-cap FTSE 250 shed 0.1% to 17,763.

In Germany, the DAX was up by 0.3% to 11,461, and in France, the CAC 40 gained 0.5% to 4,848. The Stoxx Europe 600 index was 0.4% higher at 361.1 just ahead of the close.

European currencies were mixed relative to the greenback, with the pound sterling falling by around 50 points throughout the session to trade at 1.2329 and the euro dropping by around 10 points to change hands at 1.0379 shortly before the time that stock markets closed.

Bond markets were mixed on Tuesday, with French 10-year yields falling by just less than 2 basis points to 0.71% and U.K. yields also down 2 basis points to 1.27%. Conversely, German yields rose for the session, up 2 basis points to 0.26%.

In individual stocks, in London, Lloyds Banking (LYG) - Get Report topped the board of risers after it announced the acquisition of credit card firm MBNA from Bank of America (BAC) - Get Report . The $2.4 billion deal is expected to add 4% to revenue in the first year following completion and to boost earnings per share by as much as 5%.

Prudential, Mediclinic (MCFFY) and Barclays (BCS) - Get Report were also up by more than 2% in London for the session.

Deutsche Bank was the biggest gainer on the DAX in Germany, rising by more than 2.5%, as the stock regained some of the ground lost on Monday.

Volkswagen (VLKAY) stock was up nearly 2% for the session. The company said that passenger car deliveries rose strongly in November, up 7.5% to 533,000, while the group also moved 1.6% more new cars during the first 11 months of the year than it did in 2015.

Credit Agricole (CRARY) was the biggest riser on the CAC in France, up more than 2%, as the banking sector erased losses racked up on Monday. Oil and gas services firm Technip (TKPPY) was also a top riser after chalking up a gain of 1.9% for the session.