European shares rise early; banks, commods gain

European shares moved higher in early trade on Thursday, with banks and commodity stocks the biggest gainers as investors awaited rate decisions by the Bank of England and European Central Bank.

By 0709 GMT, the pan-European FTSEurofirst 300 index of top shares was up 1.2 percent at 1,001.05 points.

Market sentiment was also given a boost after Alcoa posted a surprise profit through cost cutting and higher aluminium prices after three consecutive quarterly losses.

"Alcoa had better than anticipated results, which is good. It is now all about anticipating quarter-three earnings. There is a general sense that … earnings are going to be more positive than expectations," said Bernard McAlinden, market strategist at NCB Stockbrokers.

Banks added the most points to the index. HSBC, Banco Santander and Societe Generale were up 1.1 to 2 percent.

Commodity stocks featured among the best performers, tracking higher crude and metal prices. Energy majors BG Group, BP, Royal Dutch Shell and Total were up 0.6 to 1.1 percent.

Miners Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corp, Rio Tinto and Xstrata gained 1.8 to 3.6 percent.

Both the BoE and the ECB rate-setters are expected to keep rates on hold.