The move is seen as part of Ukraine's efforts to reinforce its army as soldiers struggle to hold positions against Russia
European shares slipped on Tuesday, as investors fretted about soaring energy prices and a weak economic outlook after data showed that business activity in the region contracted this month.
The pan-European STOXX 600 slipped by 0.1 per cent, paring some losses following the S&P Global's flash Composite Purchasing Managers' Index (PMI) data for August.
Eurozone business activity contracted for a second consecutive month in August, as the cost of living crisis forced consumers to cut spending, while supply constraints hurt manufacturers, the survey showed.
In Germany, the downturn deepened in August, as companies saw demand weaken due to high inflation, rising interest rates, and economic uncertainty. Separately, the manufacturing index rose to 49.8 in August from 49.3 the previous month, beating analyst forecasts of 48.2. Germany's DAX rose by 0.3 per cent after the data.
"Problems are mounting for the French and German economies, as a fresh snapshot shows demand has fallen due to a toxic combination of factors," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
"But investors seem to have grasped onto data which indicates some easing of supply snarl ups and input cost inflation. Hopes that there could be some respite in sight seems to have helped consumer cyclical stocks in particular," she added.
Autos and banks rose 1.0 per cent and 0.3 per cent each, while energy led gains, rising 1.3 per cent, as crude prices rose on concerns over tight supply.
Benchmark gas prices in the European Union surged 13 per cent overnight to a record peak, having doubled in just a month to be 14 times higher than the average of the past decade. Russia will halt gas supplies to Europe via the Nord Stream 1 pipeline for three days at the end of the month.
Overall, uncertainty reigns ahead for European markets, as it is feared the energy crunch could worsen, Streeter added.
Market nervousness is also set to persist ahead of the Jackson Hole meeting of global central bankers on Friday, analysts say, as investors await US Federal Reserve Chair Jerome Powell's hints on the path ahead for monetary policy, in the world's largest economy.
Among stocks, German utility Uniper SE rose 1.4 per cent after saying it would start producing electricity for the market at its Heyden 4 hard-coal-fired power plant, as a three-day halt in Russia's gas supplies to Europe may cause disruptions to power supply.
Alcon AG rose 0.9 per cent after saying it would acquire Aerie Pharmaceuticals in a deal valued at about $753 million.
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