European stocks closed higher on Wednesday afternoon as investors shifted their focus to the European Central Bank's (ECB) upcoming meeting, where they expect further monetary stimulus to be announced.
Autos and banking stocks were also gaining with the latter up by 2.4 percent - reaching new record levels. Recent reassurances on the Italian banking system seem to be calming contagion fears across the euro area. All the major bourses closed higher.
In the U.S., the Dow Jones industrial average recovered to edge higher and remains on track to hit another record high at the close.
In Italy, shares of the troubled Monte Dei Paschi were near the top of the index, jumping more than 10 percent on reports that the government is preparing to inject money and take a controlling stake in the bank. Both the Italian Treasury and the bank itself have declined to comment on this report, according to Reuters.
Italy's President Matteo Renzi announced that he would tender his resignation at 1 ET on Wednesday after a bruising defeat in the country's referendum and most rival parties are now pushing for an early election in the Spring.
Meanwhile, economists and traders were gearing up for the ECB's rate announcement on Thursday. "European Central Bank (ECB) President Mario Draghi is set to announce an extension of his quantitative easing (QE) program after the bank's Governing Council meeting in Frankfurt on 8 December. The base case is an extension by six months, prolonging QE from its currently envisaged end date in March through September 201," Carsten Nickel, deputy director of research at Teneo Intelligence, said in a note this week.
Credit Suisse lowered its 2018 pre-tax income targets for its Asia Pacific and international wealth management divisions. It also reported on Wednesday more than 1 billion Swiss francs ($0.99 billion) in extra cost cuts, according to Reuters. Its shares were up by 7.41 percent at the close.
Data released in Germany showed the country's industrial production recovering only marginally in October, increasing by 0.3 percent on the month. It was up by 1.2 percent on the year.