European shares were higher at midday on Wednesday, boosted by the European Central Bank's biggest-ever liquidity injection, with banking and mining stocks leading the way.
By 1022 GMT, the pan-European FTSEurofirst 300 index of top shares was up 1.1 percent at 842.80 points. The index had lost 3.2 percent in the previous two sessions.
The ECB lent banks 442.241 billion euros ($612.8 billion) in the 371-day operation at a fixed 1.00 percent rate. That was above the 300 billion euro forecast in a Reuters poll on Monday.
"This does indicate there is demand for funds. It suggests that there is money going into the economy, and that is exactly what the central banks want to do to reflate the global economy. This is a very supportive feature for the day," said Mike Lenhoff, strategist at Brewin Dolphin.
Banks added the most points to the index, with BNP Paribas gaining 2.7 percent. The group said it would split up Fortis Investments, leaving some areas to stand alone while allocating others to parts of the group's existing fund arm, said the deputy CEO of BNP Paribas Investment Partners.
Barclays, Deutsche Bank, Standard Chartered and Banco Santander were up 1.2-3.4 percent.
Miners were higher as copper rose 1.2 percent. Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata were up 1.5-4.2 percent.
TECHS GAIN AFTER ORACLE RESULTS
Tech stocks gained after U.S. peer Oracle reported quarterly earnings above expectations as the No. 3 software maker's profit margin hit a record, thanks to robust growth in its maintenance business. Infineon, Nokia and ASML were 1.8-5.1 percent higher.
"We're seeing a bounce, helped in part by Oracle's results that were not as bad as they could have been," said Edmund Shing, strategist at BNP Paribas.
Looking at the downside, drugmakers were in the doldrums as investors stayed away from defensive stocks. Sanofi-Aventis, GlaxoSmithKline, Novartis and AstraZeneca were 0.8-2.7 percent lower.
In economic news, investors are bracing for the U.S. Federal Reserve's interest rate decision and statement due on Wednesday.
The Fed is seen keeping its benchmark short-term interest rate near zero, but investors' attention will be on whether the Fed might expand a $300 billion programme of Treasury purchases, and signal how it might curtail its easy-money policy as the recession abates.
Investors will also keep an eye on U.S. new home sales data, looking for further insight on the health of the battered housing market.
Across Europe, the FTSE 100 index was up 0.1 percent, Germany's DAX was 0.8 percent higher and France's CAC 40 was up 0.7 percent.
