LONDON: European stocks rose for a third day on Thursday, after German and French leaders said they were determined to keep Greece in the euro zone, and the US Federal Reserve led a concerted action to address banks' problems in securing dollar funding.
Euro zone banks rose 6 percent, with BNP Paribas up 13.4 percent, boosted by the Fed and other central banks saying they would reintroduce three-month dollar liquidity operations in the fourth quarter.
The FTSEurofirst 300 index of top European shares rose 2.1 percent to end the session unofficially at 931.92 points, the highest close in a week.
"The politicians seem to have acted to avoid the euro zone blowing itself up in the near term, and inevitably that means the market goes up," said Andy Lynch, fund manager at Schroders, which manages $310 billion.
"The rally could have further to go if, over the weekend, we get a statement that the next tranche of money is going to be handed over to Greece."
On the downside, Swiss bank UBS plunged 10.8 percent after unveiling a $2 billion rogue trade loss.
Copyright Reuters, 2011
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