Lower energy costs boosted European stocks to their strongest close in nearly a month yesterday as US crude oil inventories rose, and Roche pushed up drug makers with positive drug trial results.
Swedish clothing retailer Hennes & Mauritz rallied five per cent after it beat first-quarter profit estimates.
Roche rose 1.6 per cent and topped blue-chip gainers as data showed a top-selling cancer drug co-developed by the firm also helped patients with a hard-to-treat form of rheumatoid arthritis, and opened the door to a potential new market.
Europe's FTSEurofirst 300 index ended 0.35 per cent higher at 1,098.0 points, making gains for the second day in a row. The narrower DJ Euro STOXX 50 rose 0.4 per cent.
Drug makers Novartis and AstraZeneca were also stronger, and dealers said the sector was supported by a positive outlook from industry giant Pfizer.
Around Europe, London's FTSE 100 closed up 0.1 per cent, Paris's CAC-40 ended 0.5 per cent higher, and Frankfurt's DAX closed 0.4 per cent stronger.
Markets were supported by gains in US stocks after data showed a higher-than-expected increase in crude oil supplies.
Oil shares, which have risen on the back of soaring prices for their products, crowded the list of losers. BP fell 0.5 per cent, while Total and Royal Dutch/Shell group were also lower.
"We would recommend just taking profits in some of the oil companies at the moment because they're quite expensive. Wait for them to dip back down and enter in at a lower price," said Daniel Birch, a strategist at brokers Execution.
US crude fell below $56 a barrel, retreating further from record peaks as the US Energy Information Administration said crude oil inventories, already at their highest level in three years, rose again last week.
Strategists said equity markets had room to rise. "Given that interest rate expectations are more realistic, and we suspect the falling earnings momentum is more in the second half, there is probably some near-term opportunity for a bit more upside in the markets," said Mark Precious, co-head of global equity strategy at UBS.
"We think the cash positions of companies are still very comfortable, and corporates will still continue to spend some of that cash-flow and raise dividends."
Dutch chemicals group DSM rallied five per cent and boosted the sector after saying it expected operating income in the first quarter would grow by 40 per cent from the same period of last year, double its previous forecast.