Europe markets pause; oil watched

European equities are expected to open in positive territory on Tuesday as investors take stock of and look ahead to the European Central Bank's meeting on Thursday.

Investors will keep an eye on global oilprices Tuesday after a sharp drop in the oil price on Monday on the back of a stronger U.S. dollar and a rise in Libyan crude output, according to Reuters.

Brent crude posted its biggest drop in a month on Monday, down 5 percent to settle at $59.54 a barrel but had recovered somewhat on Tuesday to trade at $60.41. U.S. crude was trading at $49 a barrel early Tuesday.

Despite the decline in oil, U.S. stocks closed higher on Monday with the Nasdaq above the psychologically key level of 5,000 for the first time since March 2000 and the Dow and S&P 500 at records as investors cheered U.S. economic data and an interest rate cut in China.

In Asian markets overnight, Australian shares erased gains to fall below the flatline on Tuesday after the Reserve Bank of Australia (RBA) surprised most market watchers by holding back on further easing. Meanwhile, otherstock indices in the region traded mixed.

In other news, tensions between Russia and the west are mounting following the death of prominent anti-Putin critic Boris Nemtsov on Friday. President Barack Obama said on Monday that the killing of opposition figure Boris Nemtsov is a sign of a worsening climate in Russia where civil rights and media freedoms have been rolled back in the last several years, Reuters reported.

However, the Russian media stepped up its defense of Russian President Vladimir Putin, who has been accused of involvement in the murder which he denies, with widespread reports on Monday that the west is waging a propaganda campaign against Putin, Reuters reported.