European shares rose on Tuesday as a strong start to the US earnings season boosted optimism about upcoming company results, and reassuring comments from Portugal soothed nerves over the sovereign debt crisis. The pan-European FTSEurofirst 300 index of top shares closed up 1.2 percent at 1,147.15 points, hovering near the highest closing level since mid-September 2008.
Forecast-beating results overnight from US aluminium company Alcoa set a positive tone for the start of the corporate earnings season, ahead of the release of results from Intel and J.P. Morgan Chase later this week. In Europe, German conglomerate Siemens rose 3 percent after saying its first-quarter profit and sales were set to surpass the year-earlier figures on robust factory demand.
Heavyweight banking stocks rebounded from falls in the previous three sessions, with HSBC and Credit Agricole both up 2.4 percent following recommendation upgrades from brokers Citigroup and Societe Generale respectively. Barclays rose 5.5 percent as BofA Merrill Lynch added the stock to its "Most Preferred List" and Societe Generale said the bank was among its top picks in the European sector. Technology stocks were also in demand, led by gains in Britain's ARM Holdings which rose 7 percent as bid speculation circulated around the chip designer.
On the downside, retailer Marks & Spencer fell 2.8 percent after saying cold weather hurt Christmas sales, and warned of tough trading ahead due to squeezed households and rising commodity prices. Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 rose 1 to 1.6 percent, while the Thomson Reuters Thomson Reuters Peripheral Euro Zone index added 1.5 percent.