Investing.com - European stocks were higher on Wednesday, led by strong gains in the financial sector and following Alcoa's upbeat fourth quarter earnings, while markets eyed the European Central Bank's upcoming policy meeting.
During European morning trade, the EURO STOXX 50 climbed 0.45%, France's CAC 40 advanced 0.40%, while Germany's DAX 30 rose 0.33%.
The ECB was widely expected to hold off cutting rates at its policy-setting meeting on Thursday, but some market participants expected the bank to flag the possibility of rate cuts later in the year.
Investors also remained cautious amid concerns about continuing political wrangling in Washington over further budget cuts and raising the U.S. debt ceiling.
But stocks were boosted after U.S. aluminum producer Alcoa kicked off earnings season by saying it swung to a fourth-quarter profit and expects global aluminum demand to grow 7% in 2013, compared with 6% in 2012.
Financial stocks were broadly higher in Europe, as shares in French lenders BNP Paribas and Societe Generale jumped 1.23% and 1.77%, while Germany's Deutsche Bank and Commerzbank advanced 1.46% and 2.57%.
Peripheral lenders also posted sharp gains, with Italian banks Intesa Sanpaolo and Unicredit surging 1.21% and 2.37%, while Spain's Banco Santander and BBVA climbed 0.63% and 0.67% respectively.
Elsewhere, Bayer rose 0.47% after CEO of Bayer Healthcare Joerg Reinhardt said the company no longer plans to sell its diabetes unit, after having evaluated different options.
In London, FTSE 100 advanced 0.38%, as U.K. lenders tracked their European counterparts higher.
HSBC Holdings climbed 0.79% and Barclays jumped 1.77%, while the Royal Bank of Scotland and Lloyds Banking rallied 1.78% and 2.16% respectively.
Mining stocks added to gains following Alcoa's earnings report, as shares in Rio Tinto and BHP Billiton rose 0.85% and 0.62%, while copper producers Xstrata and Kazakhmys advanced 0.57% and 0.62% respectively.
Meanwhile, Irish drugmaker Shire surged 1.58% following reports the company expects "double-digit" earnings growth in 2012, confirming an October 25 forecast.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.19% rise, S&P 500 futures signaled a 0.19% increase, while the Nasdaq 100 futures indicated a 0.17% gain.
Later in the day Germany was to release official data on industrial production and the euro zone was to produce final data on fourth quarter growth, while the U.S. was to produce data on crude oil stockpiles.
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