LONDON (The Deal) -- European stocks rebounded on Tuesday, galvanized by a late recovery on Wall Street on Monday and by regional corporate deal-making.

In London, the FTSE 100 jumped 1.66% to 5,971.73. In Frankfurt, the DAX leaped 1.79% to 10,321.07. The CAC 40 in Paris bounded 2.06% higher to 4,565.23.

In the U.K., Office for National Statistics figures showed that consumer price growth had returned for the first time in four months. The inflation rate stood at 0.1% in November from a year earlier, after 0.1% deflation in October. November producer price figures from the U.K. came in weaker than expected, though.

In Germany, the ZEW index of analyst and investors' economic sentiment came in ahead of expectations in December but the eurozone index lagged forecasts. Both indices rose from the month earlier.

In London, Aveva (AVEVF) , a British engineering software company, lost more than a third of its market value after a £1.3 billion ($2 billion) reverse takeover deal with Schneider Electric of France, collapsed. Aveva said the two companies had concluded it was too costly and too risky. Schneider was little changed in Paris.

UBM  (UBMPY)  rose 2.5% as the publisher announced the sale of PR Newswire to GTCR LLC-backed Cison for $841 million and said it will hand £245 million of the proceeds to shareholders after the deal closes.

Chip designer Imagination Technologies  (IGNMF)  was down more than 6% in London after reporting that it had swung to a first-half loss amid a revenue decline it attributed to a slowdown in the semiconductor and smartphone markets.

Wm Morrison Supermarkets  (MRWSY)  led Britain's three large listed food retailers higher following 12-weekly sales data from research group Kantar Worldpanel. Morrison, the U.K.'s No. 4 grocer, was up close to 4.9%, while No. 3 J Sainsbury was up more than 4% and market leader Tesco gained more than 3%.

Sainsbury was the only one of the three to have achieved 12-weekly sales growth, according to the Kantar figures.

Resources groups. including mining and commodities company Glencore (GLNCY)  and merger partners Royal Dutch Shell (RDS.A - Get Report)  and BG Group  (BRGYY)  also had a strong morning session in London.

Retailer Carpetright was up close to 5% after posting first-half results. 

In Paris, Sanofi (SNY - Get Report)  was up almost 5% on news it is in talks about swapping around €22.8 billion ($25.1 billion) of assets with privately held German pharmaceuticals company Boehringer Ingelheim.

Dialog Semiconductor (DLGNF) , a chipmaker which counts Apple as its main customer, plunged about 8% in Frankfurt, further eroding the value of its offer for chipmaker Atmel  (ATML)  it cut its revenue outlook for the fourth quarter.

Also in Frankfurt, health care plastics maker Balda was up more than 6% as the company announced that a second suitor, Stevanato Group of Italy, had made an offer. The binding €80 million proposal on the table tops a €74 million offer from Germany's Heitkamp & Thumann.

The S&P/ASX 200 closed down 0.39% in Sydney at 4,909.555, the lowest level in almost two years.

In China, the Shanghai Composite closed down 0.29% at 3,510.35, and the Shenzhen Component index closed up 0.76% at 12,495.25.

In Hong Kong, the Hang Seng closed down 0.17% at 21,274.37.

In Japan, the Nikkei 225 closed down 1.68% at 18,565.90 and the Topix fell 1.66% to close at 1,502.55.