Europe Markets

Europe shares end in the green, up 0.6%; BAT falls

European shares close higher

European shares overcame a day of fluctuations to close higher on Wednesday amid speculation over bond-buying by the European Central Bank (ECB) and the results of an upcoming bank stress test.

The pan-European FTSEurofirst 300 index provisionally ended the day 0.6 percent higher, at 1,307.43 points, after falling earlier in the day. Britain's FTSE 100 ended the day up around 0.4 percent, and both France's Cac and Germany's DAX closed around 0.5 percent higher.

In the U.S., stocks rose on Wednesday following the S&P 500's biggest jump in a year, as investors considered data signaling little movement in the cost of living in September and quarterly reports from Boeing and others.

Stress tests

Spanish news agency Efe reported that at least 11 banks from six European countries were expected to fail stress tests by the European Central Bank (ECB) and European Banking Authority - the results of which are due on Sunday. The agency cited several unidentified financial sources.

A spokesperson from the ECB told CNBC: "The ECB can't comment on individual institutions or speculation. Any inferences drawn as to the final outcome of the exercise would be highly speculative." It helped European stocks to pare losses and trade higher.

Read More11 banks to fail European stress tests: Report

Some euro zone stocks remained under pressure, however, with Greece's Piraeus Bank was lower by 2.37 percent.

ECB speculation

Earlier in the day, stocks got a boost from a Reuters report on Tuesday, citing anonymous sources, which suggested the ECB may buy corporate bonds in the secondary debt market in an effort to fight deflation. It said a decision could be made as soon as December with a view to starting purchases early next year.

The move could help to bolster the ailing euro zone economy which is mired by falling inflation, seen at 0.3 percent in September and well below the ECB's 2 percent target. However, the central bank subsequently confirmed to CNBC that "the ECB has taken no such decision".

BoE remains divided

Meanwhile, sterling fell sharply against the dollar on Wednesday after minutes from Bank of England's (BoE) latest rate-setting meeting showed that members remained split on the future path of interest rates in the U.K. Two members of the central bank's Monetary Policy Committee (MPC) - Martin Weale and Ian McCafferty - voted for an interest rate hike again in October.

Read MoreSterling falls asBank of England remains divided

Europe's 'economic momentum lagging': Nordea CEO

BAT weighs on FTSE

In other stocks news, carmaker Peugeot closed over 1 percent higher after it posted an increase in third-quarter revenue.

The Husqvarna Group rose to the top of benchmarks. The Swedish outdoor products manufacturer climbed to end the day up around 5.7 percent after its third-quarter profit beat expectations on increased cost cutting.

Finnish retailing conglomerate Kesko also rose - by 2.3 percent - after its third-quarter results also beat market expectations.

Meanwhile, British American Tobacco weighed on the FTSE 100 after the cigarette maker reported a fall in revenue due to the strength of sterling. Shares fell by as much as 3.5 percent, before paring losses to close down around 2.6 percent.

Brewer Heineken slipped over 1.1 percent, with the company highlighting wet conditions in Europe which managed to dent revenue for its last trading period.

Financial services group Nordea saw its shares lose around 1 percent after releasing new figures. CEO Christian Clausen told CNBC that the economic situation in the Nordic countries and Europe was "uncertain."

Follow us on Twitter: @CNBCWorld