NEW YORK ( TheStreet) -- The financial sector rallied on Wednesday after a successful sale of Portuguese sovereign debt lifted bank shares in Europe and the United States.

Europe financials were riding high in late afternoon trading with the iShares MSCI Europe Financials Index ( EUFN - Get Report) shooting up 5.17% to 21.95. The U.S.-based KBW Bank Index ( BKX) showed a more measured increase, up 1.55% to 53.87

Prior to opening of the U.S. markets it was reported that Lisbon managed to place ¿1.25 billion ($1.62 billion) in sovereign bonds on strong demand. Markets were skittish prior to the sale on worries that Portugal could end up requiring a bailout like Greece and Ireland.

News of the sale buoyed financial stocks, especially European banks listed on U.S. exchanges that were seen as next in line in the crisis. Spanish giant Banco Santander ( STD) is up over 11% to $10.76 and Banco Bilbao Viscaya Argentaria ( BBVA) was up 11.4% to $10.26.

Shares of other European banks were lifted as well, with HSBC ( HBC) up 4,70% to $56.14, Royal Bank of Scotland ( RBS) up 3.50% to $13.01 and Deutsche Bank ( DB) up 5.14% to $55.23.

In the U.S. banks were also up as analysts came out with a series of research notes talking up the sector, including a Goldman Sachs ( GS - Get Report) report that argued JPMorgan Chase ( JPM - Get Report), Citibank ( C - Get Report) and Bank of America ( BAC - Get Report) were among the best bets for investors ahead of their fourth-quarter earnings report.

Shares of JPMorgan were trading up 2.9% to $44.76, while Citigroup was up 2.24% at $5.05 and Bank of America's shares were up 1.74% to $14.95.

-- Written by Christopher Westfall in New York..