European blue chips moved to session highs after Tuesday's open on Wall Street, with the US advance providing fresh momentum after a sharp fall for drugs group AstraZeneca plc took some of the wind out of an earlier rally.
"With hard news thin on the ground, rumours of broker programme trades on the buy side have lifted the market," said Andrea Williams, head of European equities at Royal London Asset Management.
Europe's second biggest drugmaker said it would provide US regulators with further clinical trial data on cholesterol fighter Crestor in the first quarter of 2003, after discussions with the US Food and Drug administration.
The planned launch of Crestor, AstraZeneca's biggest new drugs hope, has been delayed in the US as the company seeks to reassure regulators on the product's safety profile. The shares were down over seven per cent.
By 1346 GMT, the FTSE Eurotop 300 index of pan-European blue chips was up 2.53 per cent at 911.22 points, just below session highs. Gainers were outnumbering fallers by almost three to one.
The narrower DJ Euro Stoxx 50 index was up 3.61 per cent at 2,535.64.
The Dow Jones industrial average was up 2.49 per cent and the tech-focused Nasdaq Composite was up 2.54 per cent.
Ericsson was up five per cent, recouping some of Monday's 17 per cent slide, which was precipitated by price target cuts from two investment banks on the back of last week's debt rating downgrades.
French peer Alcatel was one of the day's leading fallers however, amid caution ahead of results after the bell from US bellwether Cisco.
Cisco, the number one maker of gear that directs Internet traffic, is expected to reiterate weak sales forecasts and analysts will be looking for signs that an industry recovery is in sight.
"Ericsson has been boosted by rumours of a deal with Cisco, although French peer Alacatel remains mired on weak fundamentals," said Williams.
Shares in Novo Nordisk surged over 10 per cent after the world's leading maker of diabetes care products reported a surprise four per cent increase in first half profits, lifted by stronger sales.
The Danish company also stuck to its most recent forecast of an increase of up to 10 per cent in operating profit this year.
Elsewhere, shares in Nestle were up over three per cent after the Swiss food giant said it was buying privately-held Chef America Inc. for $2.6 billion in cash and debt, bolstering its position in the fast growing US frozen food market.
Economic reports on both sides of the Atlantic did little to lift sentiment. US chain store sales slipped in July, indicating that cautious consumers are hanging on to their cash amid uncertain conditions.
Instinet's Redbook Retail Sales Average fell 0.4 per cent in the four weeks ended August 3, compared with the same period in the previous month.
Meanwhile, the eurozone jobless rate rose to a two-year high of 8.4 per cent in June as sluggish economic activity prompted firms to lay off workers, according to data from the European statistics office. The increase from May's 8.3 per cent was in line with economists' forecasts, most of whom expect further rises.
Rumours that the US Federal Reserve may cut interest rates at next week's FOMC meeting were also percolating the market.
"It's unclear whether it (a cut) would be taken as a sign of panic or would be welcomed by markets, but if they do cut without having all the information on the exact state of the economy, they will have used up the most powerful weapon left in their armoury," said Robert Kerr, European equity strategist at Banc of America Securities.