European shares extended gains to close sharply higher on Wednesday, with investor sentiment boosted by U.S. stocks reaching record highs, and a successful Italian bond auction. The pan-European FTSEurofirst 300 Index closed provisionally up 1.8 percent at 1,186.62 points, the highest close since April 3 and the biggest one-day gain in a month.
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Minutes from March's Fed meeting suggested some policymakers see asset purchases slowing by mid-2013, before ending later in the year. Under its current quantitative easing program, the Fed purchases $85 billion in Treasurys and mortgage-backed securities each month.
Cyclical sectors performed best on Wednesday, with investors in risk-on mode. Banks were the top performers, with the European sector index closing provisionally up 3.7 percent.