Bourses in Europe closed lower on Tuesday as global sentiment was dampened by a gridlock in U.S. politics over health-care reform.

The pan-European Stoxx 600 (^STOXX) sunk 1.11 percent lower by close of play while U.S. markets opened in the red, responding to the collapse of Republicans' plans to replace Obamacare with a new health-care bill.

All sectors in Europe ended the day in negative territory — many down by more than a percent — as markets lost conviction in President Donald Trump 's major reform proposals.

Banks , a sector once hopeful of a Trump-led regulation roll-back, emerged as the worst performer as they took stock of the latest news from the White House. Better-than-expected earnings from Bank of America and Goldman Sachs (GS) failed to buoy the sector Tuesday, with the downturn rippling across the Europe.

Basic resources (STOXX:.SXPP) also dipped lower, closing the day down by almost 1.5 percent after miners dropped their guidance for iron ore production. Rio Tinto (London Stock Exchange: RIO-GB)'s shares were down by 1.5 percent in afternoon trade. The miner pared some losses by late deals but ultimately closed down 0.7 percent.

Technology stocks also dragged after a mini-crash in Chinese tech stocks. The technology-heavy index ChiNext plunged 5.1 percent on Tuesday to close at its lowest since 2015 after renewed calls for stronger regulation.

The focus was also on earnings Tuesday. Shares of Ericsson (Stockholmsborsen:ERIC.B-SE) sunk to the bottom of the benchmark, down more than 15.5 percent, after the company reported operating losses above expectations and announced it's speeding up cost-cutting measures.

The online retailer Zalando (XETRA:ZAL-DE) fell 8.2 percent after saying Tuesday that it expects sales growth of about 20 percent in the second quarter of this year, slightly below the 22 percent expected by Reuters estimates.

At the top of the European benchmark was spread-betting firm IG Group (London Stock Exchange: IGG-GB). Its shares were up by more than 16 percent after reporting an increase in full-year pretax profit on a higher number of clients.

Royal Mail, British land at the top of the FTSE

Royal Mail (London Stock Exchange: RMG-GB) was among the top performers of the FTSE 100, up by 3 percent. The British group announced an increase of 1 percent in revenue for the second quarter of the year despite uncertainty in the market.

British Land rose also more than 3 percent after announcing plans to spend up to £300 million to buy back its shares in the current financial year.

The Swiss pharmaceutical Novartis (Swiss Exchange: NOVN-CH) confirmed its full-year guidance with net income at $2.87 billion in the second quarter of the year. The firm added that it sees potential for "several highly innovative products." Its shares were up by 2 percent on the news before trading up 0.4 percent in afternoon deals.