European shares extended gains in afternoon trade on Tuesday, led by the banking sector ahead of White House adviser Paul Volcker's congressional testimony.

By 1441 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.8 percent at 1,026.34 points, after hitting a day's high of 1,028.19.

In Europe, banks added the most points to the index. Banco Santander, Barclays, Credit Suisse and Deutsche Bank gained 2.7 to 3.2 percent.