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Europe ends higher as banks and autos rally; Greece in focus

European shares finished higher on Wednesday with investors reacting to a slew of earnings and the negotiations surrounding Greece's bailout program.

The pan-European Euro Stoxx 600 Index closed 0.8 percent higher with a modest rally across all major bourses. Banks and autos were the main outperformers.

Credit Agricole, Peugeot rally

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Credit Agricole shares closed over 7 percent higher after the French lender posted a 13 percent increase in quarterly profit.

Peugeot led car makers higher, gaining over 6 percent after it announced a smaller loss in 2014, with strong sales in China and cost-cutting efforts improving the company's results. Renault and Volkswagen both rallied to close over 2 percent higher.

Jewelry maker Pandora also saw further gains after some stellar results in the previous session and an analyst upgrade helped the stock close 4.5 percent higher on Wednesday.

Read MoreCredit Agricole sees CEO decision by end next week

Greece talks resume

On the data front, U.K. unemployment data showed a further fall, reaching its lowest since the three months to August 2008. Wages also saw an improvement and the Bank of England released minutes of its last monetary policy meeting showing that members are unanimous in thinking that the central bank shouldn't raise interest rates. Sterling rose to a seven-year high on the news but the FTSE 100 was the major under performer for the day, ending flat at 6,898.

Greece will submit a formal request on Thursday to try to extend a rescue loan agreement, as concerns rise over the liquidity available to the country's banks.

Talks between Greece and its euro zone creditors regarding its current bailout program broke down Monday but the European Central Bank's Governing Council is set to meet Wednesday to discuss the issue further. Stocks in Athens were up 1.5 percent on Wednesday.

Meanwhile, the minutes of the latest U.S. Federal Reserve Open Market Committee (FOMC) meeting will be published after the European close.

U.S. stocks opened slightly lower on Wednesday as investors awaited the release of the Fed minutes amid continued uncertainty in the Greece-euro zone negotiations.

The U.S. backed a Russian sponsored peace proposal late Tuesday although reports state that fighting is continuing in the Ukrainian town of Debaltseve. In statement, U.S. Vice-President Joe Biden condemned the violation of the cease-fire, saying that the costs to Russia "will rise" if it continues to violate the agreement.

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