Europe's stock markets advanced for the third day running Tuesday on upbeat corporate results and a call by the head of the Boston Fed for the US Federal Reserve to launch an open-ended bond-buying programme.
London's benchmark FTSE 100 index of top companies added 0.56 percent to close at 5,841.24 points even as charges against Standard Chartered bank weighed heavily on its shares.
Elsewhere, Frankfurt's DAX 30 gained 0.71 percent to 6,967.95 points and in Paris the CAC 40 climbed 1.52 percent to 3,453.28. Madrid rose 2.23 percent and Milan added 2.19 percent.
After showing a gain of 3.0 percent in afternoon trading, Lisbon closed 2.76 percent higher at 4,847.80 points.
In foreign exchange trade, the European single currency rose to $1.2422 from $1.2399 late in New York on Monday.
In London, the emerging markets bank Standard Chartered topped the fallers board however after US regulators accused the lender of hiding $250 billion (201 billion euros) in transactions with Iranian banks, plunging the banking sector into fresh crisis.
The London-based lender saw its share price collapse 16.76 percent to stand at 1,223.57 pence, having been down by one quarter at one point.
New York regulators have branded Standard Chartered a "rogue institution" and threatened it with fines and the suspension of its licence.
The Department of Financial Services (DFS) said the London-based giant systematically disguised foreign exchange deals with Iran that potentially opened the US banking system to terrorists and criminals.
Standard Chartered snapped back, saying that it "strongly rejects ... the portrayal of facts as set out" by the DFS.
European shares were supported however by solid results in the financial sector, with Munich Re, the world's largest reinsurer, saying it would raise its profit forecast for 2012 after a better-than-expected second quarter.
In New York, US stocks also traded with solid gains in midday deals, as the Dow Jones Industrial Average was up 0.65 percent at 13,203.11 points.
The tech-rich Nasdaq gained 1.17 percent at 3,024.93, while the S&P 500-stock index rose 0.83 percent to 1,405.75.
Dow Jones Newswires reported that Federal Reserve Bank of Boston President Eric Rosengren said the Fed should launch an aggressive open-ended bond-buying programme to boost the economy until unemployment begins falling again.
Rosengren is a non-voting member of the Fed's policy-setting committee.
Asian markets mostly rose in earlier trade on Tuesday amid growing hopes that the European Central Bank would soon restart its sovereign bond-buying scheme, but gains were capped by profit-taking after recent gains.
Hong Kong finished 0.37 percent higher, Shanghai increased by 0.13 percent, Sydney climbed 0.45 percent and Tokyo rose 0.88 percent, while Seoul closed flat.
Market attention also remains focused on Spain, with speculation swirling that the government will officially ask for eurozone financial aid soon, easing its crippling debt troubles.
European and US shares rose Monday on expectations that the ECB could resume its Securities Market Programme of buying sovereign debts of under-pressure countries such as Spain and Italy on secondary markets.
On sovereign debt markets, Italian 10-year debt traded at 5.882 percent, down from 6.004 percent at the close on Monday.
But the yield on Spanish 10-year debt rose to 6.867 percent from 6.738 percent.
ECB chief Mario Draghi raised hopes at the end of July by saying the ECB would do whatever was needed to support the euro, which has come under strain from the region's long-running debt crisis.
burs-wai/rl