European shares climbed for a second straight session on Friday ahead of U.S. GDP numbers, with expectations that a multi-billion-euro aid package for Greece will be hammered out within days helping financials.
At 0829 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,073.81 points after closing 1.3 percent higher in the previous session. The index is up 66 percent since hitting a record low in March 2009.
Banks were among the top gainers, with the STOXX Europe 600 banking index rising 0.7 percent. Greek banks jumped 5 percent, extending the previous session's rally of 13 percent.
Recently beaten-down Greek banks National Bank, EFG Eurobank and Alpha Bank spiked 2.1 to 9 percent.
"The background does seem to be definitely improving for the eurozone's public debt crisis. Fundamentals for the market are still improving. The earnings that are coming through, not just on Wall Street but everywhere now, are very supportive," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"Until we get a change in direction on the interest rate front from the Federal Reserve, Wall Street is going to head higher and lead the way," he added.
European Commission President Jose Manuel Barroso said a multi-billion-euro aid package for Greece will be hammered out within days and will prevent the crisis from spilling over to other countries.
Greece readied severe austerity measures to secure the aid and avoid a debt default. Investors were comforted by signs the package could be worth as much as 100 to 120 billion euros ($133-158.5 billion) over three years — much more than an earlier reported 45 billion euros.
"Investors are betting on the official activation of the mechanism for Greece, that Greece will not default and spreads will fall further," said Takis Zamanis, head trader at Beta Securities.
BANKS UP; BARCLAYS SLIPS
Other banks also advanced, with Standard Chartered, HSBC, Lloyds, Royal Bank of Scotland, BNP Paribas, Societe Generale, Credit Agricole, Natixis and UBS rising 0.5 to 2.9 percent.
Barclays, however, fell 4.6 percent after a trading update which JPMorgan said was "disappointing", after which it lowered its earnings estimates by 2.5 percent for 2010, 2.9 percent for 2011 and 2.3 percent for 2012.
Miners got strength from higher metals prices, which rose on expectations that an economic recovery will boost demand for raw materials. BHP Billiton, Anglo American, Antofagasta, Rio Tinto , Xstrata and Eurasian Natural Resources rose 0.7 to 2.2 percent.
Investor appetite for risky assets rose, with the VDAX-NEW volatility index falling about 5 percent after slipping more than 4 percent in the previous session. The lower the index, the higher the market's desire to take risk.
Drugmakers, generally seen as defensive plays, fell. AstraZeneca, GlaxoSmithKline, Merck, Novartis, Roche Holding, Sanofi-Aventis and Shire fell 0.3 to 1.2 percent.
BP was down 0.8 percent. Its shares have fallen around 12 percent since news broke that one of its wells in the Gulf of Mexico was leaking oil.
Looking ahead, the latest U.S. economic growth figures are expected to show growth slowed in the first quarter, but resurgent consumer spending should offer evidence of a sustainable recovery.
Across Europe, Britain's FTSE 100 index, Germany's DAX and France's CAC 40 rose 0.3-0.8 percent.
