European shares were higher on Thursday morning, extending a rally into a fourth day as speculation grew that U.S. Federal Reserve chairman Ben Bernanke would announce stimulus measures for the struggling U.S. economy on Friday, according to Reuters.
Corporate results that beat forecasts also helped sentiment.
The heavyweight European banking sector , down 29 percent this year on worries about its exposure to the euro zone debt crisis, rose 1.7 percent.
French bank Credit Agricole rose 6.4 percent after it posted better than expected quarterly earnings, weighed by well-flagged losses in Greece.
Raiffeisen Bank International rose 4.5 percent after the Vienna-listed emerging European lender reported second-quarter results that beat expectations.
Other banks to gain included Royal Bank of Scotland and Barclays , up 6.6 percent and 5.2 percent respectively after recent weakness.
The FTSEurofirst 300 index of top European shares was up 0.9 percent at 944.79 points at 0816 GMT, after rising 1.4 percent on Wednesday. It was still down 15 percent in 2011.
Across Europe, Britain's FTSE 100 was up 0.4 percent, Germany's DAX rose 0.9 percent and France's CAC40 rose 1.1 percent.