European shares hit a three-week closing high on Wednesday after a US labour report revived confidence in a recovery in the world's largest economy. The pan-European FTSEurofirst 300 index of top shares ended up 0.8 percent at 1,134.63 points, its highest closing level since March 9.
Heavyweight mining shares were among the big gainers, supported by confidence in the recovery of the economy. The STOXX Europe 600 basic resources index rose 0.8 percent Within the sector, Vedanta rose 3.4 percent as traders cited a bullish note from Morgan Stanley in which the broker said the market had not recognised the miner's industry-leading growth. Carmakers were also buoyed by improved economic prospects, with the STOXX Europe 600 autos index up 1.7 percent, bouncing back from falls triggered by concerns about disruption to global supply chains in the aftermath of the earthquake and tsunami in Japan.
Defence firm Rolls Royce added 1.7 percent after broker HSBC upgraded its investment recommendation and lifted its earnings forecast. Technical indicators also showed the market had scope to push higher before being reaching the 70 overbought level, with the 14-day relative strength index on the Euro STOXX 50 hitting 53 on Wednesday, easing from oversold territory of below 30 earlier in March.
On the downside, hearing aid maker Sonova fell 11.7 percent after its chairman, chief executive and chief financial officer resigned following an insider trading probe. Bancassurer Irish Life & Permanent suspended trading of its shares in London and Dublin after media reports that bank stress tests might force it into state control. Bank of Ireland fell 9.3 percent.