This was CNBC's live blog covering European markets.

European markets closed higher on Tuesday as global investors digested the latest U.S. inflation report.

The Stoxx 600 index closed up 1%, extending the morning's gains. Sectors mostly ended the session in the green, with autos up 2.4%, while utilities fell 1.2%.

The FTSE 100 hit a 10-month high Tuesday, surging more than 1.2% in afternoon trade as slowing wage growth raised hopes for interest rate cuts.

U.S. stocks were higher in early deals after U.S. inflation data came in roughly inline with expectations and paved the way for further momentum in the stock market.

The consumer price index climbed 0.4% in February and 3.2% year over year. That was in line with economists' monthly forecast but higher than the 3.1% they expected for the annual figure, according to the Dow Jones consensus.

The uptick in January's CPI figure rattled markets and prompted Fed officials to shift their rhetoric to a more cautious tone about easing policy. The current market pricing indicates that the Fed won't cut interest rates at its meeting on March 19-20 or the one on April 30 to May 1.

Lindsay James, investment strategist at Quilter Investors, said the February figures would provide "little further reassurance" for a cautious and data-dependent Federal Reserve.

"When you also consider the strength of recent indicators, ranging from the still solid labour market to healthy corporate earnings, it seems likely that the Fed will continue to tread carefully at its next couple of monetary policy meetings," James said in a note.

"Consensus has been building around June bringing the first rate cut, but today's figures seem unlikely to add much in the way of certainty to this."

Overnight, Asia-Pacific markets mostly rose as Japan's corporate inflation figures for January came in higher than expected.

FTSE 100 hits 10-month high, gaining more than 1.2%

The FTSE 100 hit a 10-month high Tuesday, surging more than 1.2% in afternoon trade as slowing wage growth raised hopes for interest rate cuts.

The U.K.'s blue-chip index rose to 7,763.72 at 12:48 p.m. London time, its highest level since May last year, according to Eikon data.

The benchmark pared gains slightly to trade up 1.1% at 3:45 p.m.

U.K. regular wages grew 6.1% in the period from November 2023 to January 2024, the Office for National Statistics said Tuesday, returning to levels last seen in the August to October 2022 period.

— Karen Gilchrist

U.S. stocks move higher

U.S. markets moved higher Tuesday after fresh U.S. inflation data came in roughly in line with expectations and paved the way for further momentum in the stock market.

The Dow Jones rose 0.8% in early deals while the S&P 500 ticked up 1%. The Nasdaq Composite also added 1.2%.

The consumer price index climbed 0.4% in February and 3.2% year over year, the Bureau of Labor Statistics said on Tuesday

— Karen Gilchrist

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UK wage growth eases as employment rate dips

U.K. regular wage growth was 6.1% in the period from November 2023 to January 2024, the Office for National Statistics said Tuesday, as analysts noted the print is unlikely to derail expectations for the Bank of England to begin cutting interest rates toward the middle of the year.

The rate of year-on-year wage growth slowed back to a level last seen in the August to October 2022 period, and came in just below the expectation of economists polled by Reuters of 6.2%.

Wage growth including bonuses was 5.6%. Pay growth continues to outpace the rate of inflation, with total pay in real terms up by 1.4%.

The U.K. employment rate meanwhile dipped 0.1 percentage points on the quarter over the same period, coming in at 75%, though the number of payrolled employees rose by 15,000 in January.

"The easing in wage growth in January is probably still a bit too slow for the Bank of England's liking. But there are encouraging signs that a more marked slowdown is just around the corner and that an interest rate cut in June is possible," Paul Dales, chief U.K. economist at Capital Economics, said in a note.

"The further fall in the number of job vacancies from 928,000 in the three months to January to a 32-month low of 908,000 in the three months to February suggests the labour market continues to loosen more than the unemployment rate is letting on... That, alongside a fall in CPI inflation below the 2% target in April, could be enough to prompt a rate cut in the summer," Dales added.

— Jenni Reid

CNBC Pro: Barclays names three global stocks to buy for the next quarter — giving one 35% upside

Barclays has named three European stocks that investors should consider buying for the upcoming quarter.

The Wall Street bank's strategists said they have a "high conviction" since the "risk-adjusted returns are attractive" in these companies. All three stocks are also traded in the U.S.

CNBC Pro subscribers can read more here.

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CNBC Pro: ‘'Really, really cheap': Pros name 4 under-the-radar stocks to play a China turnaround

Declining foreign investment and a prolonged property slump are just some of the issues that have put pressure on the Chinese economy — and stock market.

However, things could be about to turn around for the Asian powerhouse, which left behind months of deflation in February with a 0.7% year-on-year rise in consumer prices. Factory activity in China also expanded for a third straight month in January.

The stock market too has been picking up, with the Shanghai Composite Index — which hit a five-year low in early February — gaining over 6% in the past month to cross 3,000.

One portfolio manager says these developments, which follow a raft of stimulus measures from the government, make China an appealing destination for investors once more.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

European markets: Here are the opening calls

European markets are set to open higher Tuesday.

The U.K.'s FTSE 100 index is expected to open 51 points higher at 7,718, Germany's DAX up 105 points at 17,847, France's CAC 51 points higher at 8,069 and Italy's FTSE MIB up 173 points at 33,495, according to data from IG. 

Earnings come from Lego and Persimmon. European data releases include U.K. unemployment figures for January.

— Holly Ellyatt