The Stoxx Europe Travel and Leisure index jumped 4% in early trade after U.S. President Donald Trump announced Iran and Israel had committed to a ceasefire.

London-listed airlines and leisure stocks also topped the Stoxx 600 in the morning. EasyJet rose 6.5%, InterContinental Hotels was up 3.3% and Carnival jumped 5.9%.

Multiple airlines announced on Monday they were diverting flights in the Middle East as the region's military conflict continued to disrupt flights. This morning, the office of Israeli Prime Minister Benjamin Netanyahu and Iranian state media outlet Press TV confirmed a ceasefire had begun.

— April Roach

Shares of Swedish carmaker Volvo were up 2.3% in early trade, paring earlier gains.

That came after the firm announced on Tuesday morning that its Volvo Construction Equipment arm would sell its ownership in China-based SDLG, and would acquire construction machinery supplier Swecon.

— Chloe Taylor

We're 20 minutes into Tuesday's trading session, and the regional Stoxx 600 is up by around 1.2%.

Travel and leisure stocks are leading the gains, with airlines jumping after the announcement of an Israel-Iran ceasefire. The Stoxx Travel and Leisure index was last seen trading 4.2% higher, putting it on track for its biggest one-day jump since April 10.

All major bourses are in positive territory, with Germany's DAX index jumping 1.8%.

— Chloe Taylor

The pan-European Stoxx 600 began the week on a negative note, ending Monday's trading session around 0.3% lower.

Looking at individual stocks, Monday's worst performers included Poste Italiane, which closed 6.3% lower, Danish jewelry maker Pandora, which shed 5.3%, and pharma giant Novo Nordisk, which also lost 5.3% during the session.

On Monday, it was announced that Novo had ended its deal with U.S. telehealth firm Hims & Hers over concerns about sales of Wegovy copycat drugs.

At the other end of the index, London-listed shares of Spectris jumped 15.7% on Monday after it was reported private equity firm Advent had agreed to take over the company for £4.4 billion ($6 billion). The company, which makes testing equipment, rejected a bid from private equity giant KKR earlier this month. KKR said Monday that it "strongly encourages [Spectris] shareholders to take no action with regards to the Advent offer."

— Chloe Taylor

Good morning from London on Tuesday, and welcome to CNBC's live blog covering European financial markets and the latest regional and global business news, data and earnings.

Futures data from IG suggests a positive start for European markets, with London's FTSE looking set to open 0.3% higher at 8,792, Germany's DAX up 1.1% 23,541, France's CAC 40 1% higher at 7,618 and Italy's FTSE MIB also up 1% at 39,321.

Global market sentiment rose after President Donald Trump said that there is a ceasefire timeline for Israel and Iran, prompting U.S. stock futures and Asia-Pacific markets to rise on Monday night.

"It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE ... for 12 hours, at which point the War will be considered, ENDED!" Trump wrote on Truth Social.

Neither Iran nor Israel has publicly confirmed acceptance of a ceasefire timeline, however.

Follow CNBC's live blog on all the latest developments in the Israel-Iran conflict here.

— Holly Ellyatt