Oil majors on the move included BP, up 3.4%, and Total, up 2.2%.
Banks on the rise included Deutsche Bank, up 12.4%, and Santander, whose shares rose 1.4% in Madrid after an upgrade to neutral from sell at UBS.
UBS shares climbed 4.1% after the Swiss banking group revealed that former executives have repaid around 70 million Swiss francs ($59 million) of bonuses. It will allow an independent investigation to examine whether any lawsuits should be filed against individuals.
The rise for European shares followed four days of gains for U.S. shares and an advance in Asian markets Thursday.
Indian markets were closed for the day in the wake of coordinated terrorist attacks overnight in nine or more locations in the financial capital, Mumbai. (See related article on the rampage.)
"There was a good U.S. late session last night and that's carried through to Europe today. Oil prices bounced back yesterday, which has given the oils a bit of a boost," noted Philip Shaw, strategist at Investec Securities.
"The holiday means that conditions are relatively quiet today," he added.
On a national level in Europe, the U.K. FTSE 100 index rose 1.8% to 4,226.10, the German DAX 30 index climbed 2.3% to 4,665.27 and the French CAC-40 index advanced 2.5% to 3,250.39.
A strong performance by auto makers also helped the Continental indexes, with Daimler shares up 3.6% and Renault shares up 1.1%.
Many auto makers gained Wednesday after the European Union proposed a 200 billion euro ($260 billion) stimulus plan.
Resource-sector stocks were also stronger, with miner Xstrata up 12.2%. Shares in steelmaker ArcelorMittal climbed 5.8% after it said it would cut jobs.
Turning to corporate news, shares in low-cost airline Air Berlin soared 15.3%. Third-quarter net income rose a better-than-expected 42.9% to 45.6 million euros, boosted by efficiency measures introduced in the summer.
Staying with travel, shares in Tui Travel climbed 2.6%. Winter trading is progressing well with higher average selling prices and fewer holidays left to sell in all key markets, the firm said.
Although it swung to a loss of 266.5 million pounds in the year to Sept. 30, from a pro-forma profit of 6.9 million pounds a year earlier, underlying profit rose to 398 million pounds, beating analyst forecasts.
"Given that bookings were updated just two weeks ago, the key thing in these results is the upgrade and acceleration of merger synergies," noted analysts at Deutsche Bank.
Meanwhile, U.K. home improvement retailer Kingfisher fell 2.4%.
Third-quarter retail profit from continuing operations rose 8.3% to 176 million pounds due to changes in exchange rates. On a constant-currency basis, profit was down 4% and sales were flat at 2.55 billion pounds.
Comparable sales for the period dropped 5.1%, driven by declines in its U.K.-based operations. Kingfisher also said worsening market conditions have hit trading in China.
The Stoxx index is still 43% below where it was a year ago as investors continue to fret about the global economy.
"The market is in a mood of sell first, ask questions later [but] we believe there are opportunities," he added.
Author: Jo Amey
