European stocks rebounded on Tuesday with traders hoping for an easing of tensions between Russian and the West after pro-Russian rebels agreed to hand over the black boxes from the Malaysian plane downed in Ukraine last week.

The pan-European FTSEurofirst 300 index was up 0.7 per cent in early morning trading to 1,364.75 points.

Heightened tensions between Russia and the West following the plane incident and the prospect of harsher Western sanctions on Russia, combined with escalating violence after Israel’s ground offensive in Gaza, have weighed on eq

European Union foreign ministers were scheduled on Tuesday to discuss further penalties against Russia, but the most they are expected to do is to speed up the implementation of sanctions against individuals, and possibly companies, agreed in principle last week before the plane was brought down.

Actelion, Europe's largest biotech company, was the top FTSEurofirst 300 riser, gaining 4 per cent after it hiked its 2014 profit forecast for the second time this year.

While the firm's chief executive said his strategy to stay independent was supported by shareholders, traders speculated on possible bids from larger firms such as AstraZeneca, Roche, GlaxoSmithKline or Novartis.

Elsewhere, corporate updates were less upbeat with French media group Publicis Group and Norwegian aluminium producer Norsk Hydro both disappointing.

Their shares fell 5 per cent and 2.4 per cent, respectively.

Reuters