European benchmarks surged on Wednesday after a hawkish appearance from Federal Reserve Chairwoman Janet Yellen, before lawmakers in Washington lifted the mood among the continent's investors.
Yellen said on Tuesday that the Fed will likely raise short-term interest rates at its upcoming meetings to avoid being forced into a steeper hike at a later date. But the Fed chair also sought to calm fears that the U.S. central bank might soon begin to shrink its balance sheet, which expanded dramatically during its crisis-era bond buying programs.
European banks were out in front once again on Wednesday, leading the way, aided by what has been a solid earnings season for the sector.
According to analysts at Barclays (BCS) - Get Barclays PLC Sponsored ADR Report , nearly half of all European banks reporting in the current season have beaten expectations for earnings, while two-thirds beat estimates for sales.
The mining and energy heavy FTSE 100 rose by 0.47% to 7,302 in London, while the more domestically representative FTSE 250 index touched a new all-time high of 18,827, after rising by 0.20%.
In Paris, the CAC 40 index gained 0.59% to settle at 4,924 and the DAX in Frankfurt added 0.19% to close at 11,793. The Europe Stoxx 600 index, the broadest measure of European stocks, rose by 0.40% to be quoted at 371.7.
Ashtead, the construction equipment rental firm, rose due to its big-dollar income stream and its exposure the U.S. construction and civil engineering space.
BHP benefited from news that striking workers at the Escondida mine in Chile, the world's largest copper-producing asset, have entered government-backed mediation. But this didn't stop copper prices from rising again during the session.
In Paris, Credit Agricole (CRARY) stock rose more than 5% after it beat expectations for earnings in the fourth quarter. The French lender reported a 14% beat for profit before tax, a solid performance across all divisions and announced a dividend that was in line with market expectations.
Air Liquide (AIQUY) featured as the second-largest riser on the CAC, with a gain of just more than 3%, after it reported a 15% rise in sales for 2016 and said that it sees a solid year ahead.
In Frankfurt, Deutsche Bank (DB) - Get Deutsche Bank AG Report , Commerzbank (CRZBY) and Lufthansa (DLAKY) formed the lineup that featured at the top of the DAX, with gains ranging between 1.6% and 2.5%.