European stocks higher with central bank decisions in focus; Commerzbank shares hit 12-year high

The pan-European Stoxx 600 index was 0.75% by 11:10 a.m., with all major bourses and virtually all sectors in the green. Banks were up 1.33% while tech stocks were 1.23% higher.

Shares of Commerzbank hit a 12-year high on reports from Bloomberg that UniCredit is seeking approval from the European Central Bank to build up a 30% stake in the company. Shares pared earlier gains to trade nearly flat.

Elsewhere, retail stocks added 2.15%, led by British home improvement firm Kingfisher, which jumped 6.4% after it raised the lower end of its profit range on improved sales.

It follows a negative start to the week for the regional benchmark, which closed 0.2% lower Monday.

Investors are awaiting key monetary policy decisions the week, with the U.S. Federal Reserve widely expected to cut rates for the first time in four years on Wednesday.

Policymakers at the Bank of England and the Bank of Japan also meet on Thursday and Friday, respectively.

Asia Pacific markets were mixed on Tuesday, with Japan's Nikkei 225 dropping over 2% as the yen strengthened ahead of the Fed decision. U.S. futures were little changed.

Back in Europe, German economic sentiment darkened slightly in September in another sign of woe for the country's troubled economy, the ZEW Economic Sentiment Index showed Tuesday.