Euro Shares End Higher on Rate-Cut Hopes

European shares gained 1.7 percent on Wednesday, snapping a two-day losing streak as banks and commodity stocks rose and a series of U.S. data releases soothed some concerns over the outlook for economic growth.

The FTSEurofirst 300 index of top European shares ended unofficially 1.7 percent higher at 1,526.09 points, its biggest one-day percentage gain in a week, with banks the top weighted gainers.

HSBC was 3.1 percent higher, Royal Bank of Scotland jumped 6.3 percent and Barclays put on 3.1 percent, helped by growing expectations for the Bank of England to cut rates on Thursday.

Index heavyweight oil shares rose on higher crude prices, with BP up 3.5 percent, Total up 2.9 percent and Royal Dutch Shell rising 2.4 percent. Crude oil rose 1 percent to above $89 a barrel.

Mining shares were also higher on sustained consolidation talk after Xstrata bid for coal miner Resource Pacific. Xstrata, Vedanta, BHP Billiton, Anglo American and BHP's bid target Rio Tinto were up 3 percent or more.