The banking sector—which has been beaten up in recent months—finished 2.5 percent up, despite some negative news for the sector.
Moody's changed its outlook on 12 U.K.-based banks Tuesday, after the country's referendum on European Union membership. Eight of the 12 banks, including Barclays, HSBC, Santander UK and TSB Bank, were downgraded to negative from stable. Shares of Barclays however jumped 4.9 percent, while HSBC also closed higher.
Italian banks were in focus after Italy's Prime Minister Matteo Renzi said he was talking to European institutions about how to support the country's lenders, and reports on Tuesday suggested that government money could be injected into the firms.
However, on Wednesday, an EU official told Reuters that while the European Commission was ready to support Italy's banking sector, it had not given its backing to Rome's plan to prop up the country's banks, in light of the Brexit turmoil. During the session, Italian banks pared some of their gains, including Mediobanca, closing up 3.5 percent, and Intesa Sanpaolo and Unicredit closing off their session highs.