Autos and Credit Suisse led European shares higher yesterday afternoon, with follow-through gains on Wall Street lending a hand.
Semiconductor-related shares helped the technology sector clock up strong gains on hopes of an industry recovery.
But engineering firm ABB fell 2.4 per cent to €4.39 as investors worried about a probe into illicit payments by a unit in Africa.
By 1404 GMT, the FTSE Eurotop 300 index was up 1.8 per cent at 848.51 points, while the DJ Euro Stoxx 50 index gained 2.2 per cent to 2,420.07 points.
A rally of some 30 per cent from a six-year low in mid-March has been stopped in its tracks in recent sessions and indices have yet to regain the January levels matched mid-June.
Analysts now see shares trading in a range over coming months until there is better evidence of improvement in the economy and corporate earnings.
On Wall Street, the Dow Jones industrial average gained 0.5 per cent to 9,078 points.
The Nasdaq Composite gained one percent to 1,657.65 points. After some mixed economic numbers on Tuesday, investors welcomed news that US factory orders in May rose by an unexpected 0.4 per cent, beating forecasts of unchanged levels from the prior month.
Remaining key data for the holiday-shortened week in the United States with the June US non-farm payrolls will be released on Thursday.
Wall Street closes early today and all day tomorrow in observance of Independence Day holiday.
Shares in Credit Suisse rose 5.6 per cent to 36.70 Swiss francs after a US judge dismissed some claims against investment banks, including a unit of Credit Suisse, by investors who said analyst research had caused them to lose money.
Europe's auto sector advanced three percent to just short of its best level for 2003.
Figures released late on Tuesday showed that Germany's BMW sold 10.5 per cent more cars in the United States in June, while Renault was lifted by a strong US performance by its Japanese partner Nissan.
BMW shares rose 3.6 per cent to €33.72, while Renault was up 5.6 per cent at €46.67, touching a year high at €47, though some analysts remained cautious about the sector.
"It's too early to talk of a turnaround," said Michael Punzet, an analyst at Landesbank Rheinland-Pfalz in Germany.
German chipmaker Infineon led a rebound in European semiconductor stocks due to price increases in memory chips.
"Infineon is up on increased DRAM prices. The sentiment for the DRAM market in July is very positive," said one trader.
Shares in Infineon were 6.2 per cent higher at €8.71, while those in Geneva-based rival STMicroelectronics were up 3.9 per cent at €18.43.