European stock markets rose Wednesday following a report that global finance regulators will give lenders a decade or more to meet stricter capital rules.
In Europe, the FTSE 100 index of leading British shares was up 33.19 points, or 0.6 per cent, at 5,318.96 while Germany's DAX rose 72.11 points, or 1.2 per cent, to 5,883.45. The CAC-40 in France was 34.40 points, or 0.9 per cent, higher at 3,868.49.
Banks were in demand in Germany and France, in particular after the Nikkei financial daily reported that global banking regulators plan to delay new capital adequacy requirements for at least 10 years. The proposed requirements were regarded as particularly onerous for Japanese banks but Japan's Financial Services Agency said there was no agreement in place.
On the DAX, Commerzbank AG and Deutsche Bank AG were the biggest risers of the day while on the CAC-40 BNP Paribas SA and Société Générale SA were prominent gainers.
However, the stock was kept in check ahead of what could potentially be a crucial statement from the U.S. Federal Reserve at the conclusion of its last rate-setting meeting of the year.
There are mounting expectations that the accompanying statement will be slightly more hawkish than before following a string of better than expected U.S. economic data, particularly related to jobs.
Wall Street was set to recoup some of Tuesday's losses - Dow futures were up 48 points, or 0.5 per cent, at 10,446 while the broader Standard & Poor's 500 futures rose 6.4 points, or 0.6 per cent, to 1,110.30.
Investors are also fully aware that gains could well peter out as this is the last full trading week of 2009 and investors may use the opportunity to bolster their portfolios by locking in gains made over the last nine months.
Oil rose above $71 a barrel, extending its gains after snapping a nine-day losing streak a day earlier, as industry data showing a sharp drop in U.S. distillate stockpiles overshadowed signs of weak demand.
Gold rose above $1,130 an ounce after above-consensus euro zone data lifted the euro from lows, but prices were rangebound amid caution ahead of the Fed monetary policy statement.
Traders were also closely eyeing U.S. November consumer price inflation data at 1330 GMT, after a higher-than-expected reading of the producer price index on Tuesday sparked a price rebound.