Germany's blue-chip Dax index has hit a one-year high amid rising investor confidence ahead of key meetings by European and US central bankers, and as concerns over Italy's political future is easing.
In morning trading on Thursday, the German stock market index Dax climbed 0.5 percent to 11,035.76 points - its highest level for one year, and leading other European indices also higher.
Earlier Asian markets extended gains after another record close on Wall Street Wedesday, with Japan's SoftBank surging after Trump said the telecoms giant had agreed to invest $50 billion in the US.
In Europe, traders brimmed with confidence as the European Central Bank is widely expected to prolong its massive monetary stimulus during a policy meeting later on Thursday.
City Index research director Kathleen Brooks said she was confident that the ECB would continue to pump 80 billion euros a month into financial markets under its asset-buying program - a measure also known as quantitative easing (QE).
"It is likely that the ECB will deliver on the markets' expectations, and extend its QE program. The calm market reaction to Italy's NO vote in last weekend's referendum should ease the pressure on the ECB," she told the news agency AFP.
Italy worries ease
Italians' rejection of constitutional reforms in Sunday's referendum have not roiled markets as some observers had feared. Italian Prime Minister Matteo Renzi announced he would resign later Wednesday after parliamentary approval of Italy's 2017 budget was completed.
Shares in crisis-hit Italian bank Banco Monte dei Pasci di Siena (BMPS) shot higher by nearly 11 percent on reports that Italy's government is preparing a plan of action should the lender's own rescue efforts fail. Other Italian banking stocks were also sharply up, as were many other financials across Europe.
"The Italian banking sector got some relief, and this underpinned the European sector," Frederic Rozier, an asset manager at Meeschaert Gestion Privee in Paris, told AFP.
uhe/jd (Reuters, AFP, dpa)