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London - European shares hit a five-week intraday high on Tuesday, with banks buoyed by strong results from UBS and relief over plans by regulators to scale back tough rules.
By 08:28 GMT, the FTSEurofirst 300 index of top European shares was up 0.6% at 1 055.14 points, having earlier hit its highest level since June 22.
The Euro STOXX 50 index, the eurozone's blue-chip index, was up 1% at 2 770.28 points, holding above its 50% Fibonacci retracement from a high in April to a low in May of 2 737.62 points - a key technical level which it crossed for the first time in five weeks on Monday.
A raft of corporate results dictated the direction for equities as the European earnings season gets into full swing.
"Expectations are rising for earnings. Companies are guiding full-year forecasts up in spite of concerns about a loss of recovery momentum ... and that is helping to keep these markets reasonably firm," said Mike Lenhoff, chief strategist at Brewin Dolphin.
UBS surged 8.2% as the bank said strong equities and currency revenues drove second-quarter net profit well above forecasts.
French banks Societe Generale, Credit Agricole and BNP Paribas featured among the top gainers, up 6.4% to 8.8%, boosted by strong results from peer UBS and as the Basel Committee said they will scale back many of the proposals to beef up bank capital and liquidity rules.
"As key Basel 3 'losers', the French banks should benefit from these revisions, in addition to the sovereign disclosure at the stress tests," UBS analyst Omar Fall said.
The results of European bank stress tests late on Friday helped restore confidence in the sector as it contained no major negative surprises, and showed only seven of 91 banks failed the tests aimed at gauging banks' ability to withstand financial shocks.
"Though one might question the merits (of the stress tests), the formality of having gone through the exercise is a worthy undertaking as it demonstrates the eurozone is attempting to resolve its sovereign debt crisis and that is helping to improve the underlying tone of the market," Lenhoff said.
Also rising after results, Deutsche Bank added 3.1% after Germany's top lender posted second-quarter pretax profit in line with expectations, helped by lower loan loss provisions amid weaker industry trends in investment banking.
Oil major BP said it would take a charge as a result of the Gulf of Mexico oil spill amounting to $32.2bn, driving it to a second quarter loss of $16.97bn.
It also announced that Chief Executive Tony Hayward will step down on October 1 and will be replaced by fellow executive Robert Dudley. The stock added 0.5%.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 rose 0.6% to 1%.
Klepierre slips
French property group Klepierre shed 6% after its chief executive painted a glum picture of consumer spending for the rest of 2010. The firm reported a fall in first-half rental income on a like-for-like basis and a fall in net cash flow per share.
Among other movers, Intercontinental hotels fell 6.3% after traders said Barclays Capital placed 29.9 million shares between 1 120 and 1 130 pence each.
- Reuters
