European shares rose on Thursday ahead of several key central bank interest rate decisions, with banks gaining on a more positive global recovery sentiment and oil spill-hit BP moving off its lows.
By 0916 GMT, the FTSEurofirst 300 index of top shares was up 0.7 percent at 1,005.78 points after earlier being as low as 989.22. The index is down around 9.6 percent from a mid-April peak on concerns about the euro zone debt crisis.
Interest rate decisions are due by the European Central Bank at 1145 GMT and the Bank of England at 1100 GMT.
In London, BP stock was down 5.4 percent off session lows, althoguh this is still down 43.4 percent since the massive oil spill in the Gulf of Mexico began in April, wiping about 53.5 billion pounds ($78 billion) off its market capitalisation.
"The reversal from BP off its lows is helping," said Giles Watts, head of equities at City Index. "We have seen quite a lot of people coming into buy it."
The oil giant said it had the financial flexibility to deal with liabilities related to the spill, and that it was unaware of any justification for the collapse in its share price.
The company is under pressure from U.S. officials to forego their dividend because of the likely costs associated with the spill.
"BP is such a big player and is really causing jitters across Europe," said Will Hedden, sales trader at IG Index. "If it has to go ahead and cut its dividend, it is really going to be seen as a bad thing."
Meanwhile, ARM Holdings soared 10.6 percent after traders cited talk of a bid from Apple, although a spokeswoman for ARM said it had not received an approach and a takeover from Apple would not make sense.
Banks reversed earlier sessions gains to feature among the top performers. Banco Santander, BBVA and Barclays all rose 1.7 to 2.5 percent.
Deutsche Bank fell 0.9 percent after a report in Germany's financial daily Handelsblatt said that a U.S. unit of the bank, Taunus Corp, may need fresh capital and has drawn attention from U.S. regulators.
HOME RETAIL FALLS
Home Retail, Britain's No.1 household goods retailer, fell 4.1 percent after it posted a bigger than expected drop in first-quarter sales.
Nokia slipped 0.5 percent pressured over continued fears over a possible profit warning following rumours on Wednesday. The company declined to comment.
On the upside, Swiss drugmaker Novartis gained 2.1 percent ahead of a U.S. advisory panel meeting later in the day, which will vote on whether to recommend Gilenia as the first pill to treat multiple sclerosis.
Meanwhile, the ECB interest rate is expected to keep rates unchanged and could offer extra funds to banks to ease the strain caused by the euro zone's debt crisis.
At the latest BoE rate decision, the first to be made after the formation of the new British coalition government the BoE is seen holding rates steady.
Across Europe, the FTSE 100 index was up 0.2 percent, Germany's DAX was 0.5 percent higher and France's CAC 40 gained 0.8 percent.
Spain's IBEX 35 was up 1.6 percent, Portugal's PSI 20 rose 0.6 percent and Italy's benchmark gained 1 percent.
