European shares rose on Wednesday, as BP lifted oil majors after it released a report into its Gulf of Mexico oil spill, offsetting falls in banks on concerns over the financial sector's resilience.
Traders also cited the results of a Portuguese bond auction as helping bolster sentiment. The premium investors demand to hold Portuguese government bonds rather than benchmark German Bunds fell from session highs after Portugal successfully raised 1.04 bln euros in the bond market.
By 1137 GMT, the pan-European FTSEurofirst 300 index rose 0.7% to 1,069.38 points, rebounding from falls early in the session.
Oil and gas majors were higher, led by gains in heavyweight BP, which added 1.7% after releasing an internal report where it deflected much of the blame for a rig blast that led to the United States' worst-ever oil spill, as it said drilling contractor Transocean had missed danger signs.
The stock was also boosted by a three-notch upgrade by credit ratings agency Fitch.
"The oil majors are higher after Fitch upgraded BP, and there is some relief over the Portuguese bond auction," a London-based trader said.
Within the sector, BG Group, Total and Repsol were up 0.3 to 1.1%.
Financials were the top losers, with Barclays, Societe Generale and Deutsche Bank down 0.7 to 2.5%.
National Bank of Greece fell 6.3%. It unveiled a plan on Tuesday to raise 2.8 bln euros via a rights issue, a convertible bond, and the sale of a stake in its profitable Turkish unit.
BANK RULES EYED
Investors are waiting for details of new rules by the Basel Committee that will determine how much capital banks will have to set aside as a safety net, with details expected on Sunday.
"Worries about the stability of the banking system have not gone away and until there is more clarity (on new capital requirement rules for the banks), investors look to be more comfortable sitting on the sidelines," the trader said.
Bundesbank Vice President Franz-Christoph Zeitler said the talks on Tuesday had made him more optimistic that banking regulators will be able to reach their twin goals of increasing the stability of the international financial system, while not forcing changes on banks that would crimp lending or hurt the economy.
Across the Atlantic, investors will watch details from U.S. President Barack Obama as he is set to unveil billions of dollars in new business tax incentives and spending on big construction projects on Wednesday, intended to spur the economy and create jobs.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 were up 0.2 to 0.7% higher. The Thomson Reuters Peripheral Eurozone Countries Index was up 0.3%.
