European Shares End Sharply Higher, Banks Rally

European shares jumped 2.6 percent on Wednesday, driven by a rally in recently beaten-down banks and tracking strong gains across the Atlantic, where hopes of a U.S. rate cut buoyed equities.

The pan-European FTSEurofirst 300 index notched up its biggest one-day percentage gain since April 2003, ending provisionally at 1,500.86 points, and benchmarks in Britain, Germany and France rose between 2.3 and 2.7 percent.

Banks were the top performers, with UBS gaining 6.7 percent, Barclays rallying 5.7 percent and BNP Paribas rising 3.7 percent.

"An awful lot of U.S. banks are up sharply and European banks are rallying on that. If this is not the bottom, then it's very close," said a trader in London.