European shares chalked up their fourth consecutive session of gains after weak German business sentiment data spurred hopes the ECB might move to cut interest rates when it meets next week.
The pan-European FTSEurofirst 300 ended provisionally up 0.7 percent at 1,191.64 points.
Germany's Ifo Business Climate index, a monthly survey that measures business sentiment, came in at 104.4 for April, against a forecast of 106.2. Analysts said the soft numbers could encourage the European Central bank to cuts rates when it meets next week.
Hopes for a rates cut were also spurred by ECB Vice President Vitor Constancio, who said euro zone inflation is falling significantly and monetary policy will remain accommodative.
(Read More: ECB Rate Cut Could Bring Big 'Disappointment')
Elsewhere in Europe, Italian President Giorgio Napolitano gave Enrico Letta, deputy head of the center-left Democratic Party (PD), a mandate to try to form a new government.
After the announcement, Letta said support from other parties was needed and the government should not be "formed at all costs". He also said he would focus on labor and institutional reforms, and criticized the European Union for focusing too heavily on austerity policies.
(Read More: Italy's President Invites Letta to Form Government)
European shares were also boosted by a number of upbeat first quarter earnings reports. British insurer Standard Life and Portuguese retailer Jeronimo Martins closed 8 percent and 6.8 percent higher respectively after posting strong numbers.
However, they were beaten to the top of the Euro Stoxx 600 Index by Peugeot Citroen, after the auto maker said it would seek cost-saving concessions from French unions to help meet turnaround targets. Peugeot posted a further sales slump in the first quarter.
At the other end of the Euro Stoxx 600 Index, Heineken plummeted around 5 percent after cutting its growth outlook for 2013. The world's third largest brewer said beer sales fell in every region except Asia during the first quarter.