European stock markets rose on Wednesday as a rebound across the banking sector, resurgent commodity prices and strong gains for many automotive manufacturers lifted benchmark indices.

The Cac 40 in Paris led the charge throughout much of the session after being buoyed by a heavy concentration of banking and automotive stocks within its ranks, but it later gave back some of its gains.

London's FTSE 250 was the strongest performer out of European indices after closing 0.93% higher at 17,792.28, while the FTSE 100 was up 0.61% at 6,849.38.

The Cac in Paris claimed second place after closing 0.77% higher at 4,432.45. Germany's Dax was up 0.74% at 10,438.34. Spain's IBEX was 0.6% higher at 8,740.40 by the closing bell.

Across the continent, markets were boosted by a rebound of banking stocks. 

Deutsche Bank (DB) - Get Report  rose by more than 2.04%, to close at €10.77, although the shares were sent even higher early on in the session as investors responded to news that the bank has reached an agreement to to sell its Abbey Life insurance business for $1.2 billion.

The German Finance Ministry today denied it's working on a rescue of Deutsche Bank following a report it had hatched a plan to take a 25% in the lender as a last resort.

Royal Bank of Scotland (RBS) - Get Report  shares were up 1.35% after it reached a $1.1 billion settlement with the National Credit Union Administration Board to resolve two civil lawsuits. The claims were brought by the U.S. US Central Federal Credit Union and Western Corporate Federal Credit Union.

In London, consumer facing firms such as Sky (SKYAY) and Dixons Carphone (DSITF) ranked among the top risers, after gaining 4.1% and 2.5% respectively. Both companies benefited from a lighter mood among investors, which was further supported by early morning comments from Bank of England policy maker Nemat Shafik.

The rate setter told an audience at a conference on Wednesday that forward looking indicators of U.K. economic health have perked up of late, but suggested that further monetary stimulus would likely be required to "ensure that a slowdown in economic activity doesn't turn into something more pernicious."

Commodity stocks Rio Tinto (RTPPF) and BHP Billiton (BHP) - Get Report  rose strongly during the session, before coming to rest 2.7% and 1.8% higher.

The miners drew much of their support from rising commodity prices, with iron ore gaining more than 2% during the London session while copper, nickel and zinc prices also rose.

In France Peugeot (PEUGF)  and Renault (RNSDF)  were up by 2.7% and 1.9% respectively as investors welcomed a raft of partnerships and development progress on the electric car subject at the Paris Auto Show.

German auto firms also benefited from excitement over electric cars, with Volkswagen (VLKPY) and Daimler (DDAIY) up by 1.2% and 0.9% respectively, making them among the biggest risers on the DAX.

In Spain, industrial firms Tecnicas Reunidas (TNISF) and Viscofan (VSCFF)  rose strongly, up by 5.8% and 1.5% respectively, while the commodity exposed ArcelorMittal (MT) - Get Report also rose more than 1.5%.