European equities closed higher Wednesday, boosted by a World Bank report that said global growth is set to accelerate in 2014, and after Wall Street chalked up its strongest performance in 2014 over the previous session.
The FTSEurofirst 300 Index rose to fresh highs not seen since 2008, provisionally closing up 1 percent at 1,339.06 points.
The Italian index, the FTSE MIB, was back to levels not seen since the country became engulfed in the euro zone debt crisis, with the index topping 20,000 points on Wednesday for the first time since July 2011, closing up 1.6 percent. The German DAX provisionally closed up 2.03 percent.
It came after Asian stocks enjoyed a strong rebound following Tuesday's sell-off, although Chinese shares underperformed on the back of some weak data.
Underpinning sentiment was a strong lead from Wall Street on Tuesday, where indices chalked up their strongest performance of the New Year thanks to upbeat retail sales data, which helped offset concerns about the U.S. economy following Friday's weak jobs report.
This continued on Wednesday, with U.S. stocks rising and with the S&P 500 just points away from its record high. It came after data illustrated that manufacturing in the New York region expanded more rapidly in January and as Bank of America reported earnings and revenue that topped Wall Street's expectations.
Data Wednesday showed manufacturing in the New York region increasing in January, with the Federal Reserve Bank of New York's economic index rising to 12.51.
German GDP misses
Investors also cheered an improving global economic outlook on Wednesday, after the World Bank said in its latest Global Economic Prospects report that global growth is set to accelerate in 2014, five years after the start of the financial crisis.
Growth is projected to strengthen to 3.2 percent this year, 3.4 percent in 2015, and 3.6 percent in 2016 - up from 2.4 percent in 2013.
"Most of the acceleration is expected to come from high-income countries, as the drag on growth from fiscal consolidation and policy uncertainty eases and private sector recoveries gain firmer footing," the World Bank wrote in its report on Wednesday.
(Read more: Global economy at a turning point?)
On the data front in Europe, Germany's first estimate of annual gross domestic product (GDP) came in at 0.4 percent, lower than expectations of a 0.5 percent rise in a Reuters poll.
Meanwhile, separate data showed the euro zone November trade surplus reached 17.1 billion euros ($23.25 billion) from 16.8 billion euros in October. This figure beat estimates of a surplus of 17.0 billion euros.
While in France on Tuesday, President Francois Hollande championed a pro-business agenda of tax and spending cuts to revive France's flagging economy, sidestepping public scrutiny over allegations that he had an affair with French actress Julie Gayet.
In stocks news, luxury retailer Burberry reported a strong Christmas trading period on Wednesday; shares closed higher by around 4.6 percent.
Apple's German-listed stock closed up 2.15 percent after the iPhone's official launch on the China Mobile carrier in China. Tim Cook, CEO of the tech firm, called it a "watershed" moment.
(Read More: Apple-China Mobile deal a 'watershed' moment: Tim Cook )
German airline Lufthansa received a bounce after a price target upgrade by Citigroup; shares provisionally closed 4.2 percent higher.
Fraport - the German transport company which operates Frankfurt Airport - also saw shares move in a positive direction. This came after the release of passenger volume figures for December which helped shares end the day roughly 3.2 percent higher.
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