By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets were on track to break a two-day losing streak on Tuesday, with heavyweights such as UBS AG, Novartis AG and BP PLC heading north after well-received earnings reports.

The broad-based gains came after most markets slumped on Monday, as banks moved sharply lower after stress-test results from the European Central Bank and European Banking Authority. Read: Banks shares catch a cold even after surviving health check

Market reaction: The Stoxx Europe 600 index climbed 0.7% to 327.44 on Tuesday, recovering from a 0.6% slide on Monday.

Germany's DAX 30 index rallied 1.3% to 9,023.64, as all companies in the benchmark traded in positive territory.

France's CAC 40 index added 0.4% to 4,114.78, while the U.K.'s FTSE 100 index rose 0.5% to 6,393.66.

Earnings: Shares of Novartis rose 2.4% after the Swiss drug maker said third-quarter profit jumped 44%.

UBS (UBS) added 3.4% after the Swiss bank reported a rise in third-quarter earnings, although it said it was hit by 1.8 billion Swiss francs ($1.9 billion) in legal provisions.

BP (BP) rose 0.5%, after the energy major said it will raise dividends for the third quarter to 10 cents, a 5.3% increase on the year. The company also said Russia sanctions have had no material impact on the company, although it has felt a squeeze from the falling ruble.

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