European stocks were expected to open higher on Thursday after rallying on Wednesday as investor hopes were raised over European Union plans for a coordinated recapitalization of the region's banks and German Chancellor Angela Merkel confirmed that Germany was ready to recapitalize its banks if necessary.
The FTSE was called 30 points higher, the DAX in Frankfurt was expected to open up by 21 points and the CAC 40 was predicted to be higher by 15 points.
The STOXX Europe 600 Banking Index recovered from three days of declines on Wednesday, closing up 3.1 percent. Deutsche Bankrose 7.6 percent in Frankfurt, while French bank BNP Paribas gained 8.5 percent in Paris. Shares in battered Franco-Belgian bank Dexia gained 1.3 percent in Brussels on Wednesday, bring their weekly loss to 29 percent.
In Asia overnight, shares rose amid renewed optimism over Europe's bank plans and following better-than-expected data from the US suggesting the world's largest economy could avoid falling back into a recession.
Dominating headlines was the death of Apple co-founder Steve Jobs, one of the world's great entrepreneurs, at the age of 56 after battling pancreatic cancer.
The euro rebounded against the dollar late on Wednesday following news from Germany that it was ready to act on domestic banks, but fell slightly in Asia trading overnight ahead of a highly anticipated European Central Bank monetary policy meeting.Page 1 of 2 | Next Page