European stocks finished off earlier highs but still ended with strong gains as optimism returned to the markets. Across the markets, the German DAX rose 124 points to 5,940 with the French CAC up 90 points to 3,423.
Banks, including Societe Generale, Credit Agricole, BNP Paribas, Commerzbank and UBS, were in demand.
Late on Monday, the EU's economic and monetary affairs chief, Olli Rehn, said countries that discover problems with their banks when they stress-test them could turn to an existing EU state back-up scheme.
Miners are also very strong with gains for Xstrata, Vedanta and Antofagasta.
BP has added to yesterday’s gains. It has denied looking to raise new money from sovereign wealth funds, but is just highlighting its strengths to potential investors.
TUI’s shares soared after the group upped its guidance for its 43.3%-owned container-shipping operations, Hapag-Lloyd, thanks to a recovery in the sector.
Petroplus Holdings increased after the refiner was rated “trading buy” by Credit Suisse Group and increased its price estimate by 1.5 francs. Elsewhere in the world, the Australian central bank left rates steady at 4.50% for a second month on Tuesday, in line with forecasts.
The Reserve Bank of Australia, which has raised rates six times since October, remained upbeat on the outlook for its domestic economy.
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