European shares close higher; oils gain

European shares closed higher on Wednesday, with oils gaining as crude rose to more than $80 a barrel, and as U.S. companies continued to beat forecasts for third-quarter earnings.

The FTSEurofirst 300 index of top European shares rose 0.5 percent to a provisional close of 1,026.09 points, recouping almost all of the losses from the previous session, and taking it to near its highest close since Oct. 3, 2008.

The index is up 59 percent from its lifetime low of March 9, as investors have become more confident on the prospects of economic recovery.

"The general theme continues to be that the significant improvement we have seen in economic indicators also shows up in Q3 earnings," said Tammo Greetfeld, equity strategist at UniCredit Group.

"All the fundamental factors in the equity market are still intact, and the upward strength will continue, though a breather is overdue."

Crude oil prices soared above $80 a barrel to trade at one-year highs, after U.S. government data showed that inventories rose less than expected. The oil price was also supported by the dollar weakening to trade at more than $1.50 against the euro.

ENI, BP, Royal Dutch Shell and Repsol rose between 0.8 and 1.2 percent.

Morgan Stanley reported better-than expected quarterly profit on strong fixed income sales and trading revenue and improved investment banking underwriting results, sending its shares up 6.9 percent.