The pan-European STOXX 600 benchmark closed with a 1 percent gain near a three-day high hit earlier in the session, with all major country and sectoral indexes gaining between 0.5 percent and 2 percent on the day.
Spain's stock market closed at its highest since Oct. 10, boosted mainly by its banking sector.
The US midterm elections saw Democrats ride a wave of dissatisfaction with President Donald Trump to win control of the US House of Representatives on Tuesday, giving them the opportunity to block Trump's agenda and open his administration to intense scrutiny.
A divided Congress could be neutral for equities overall, some dealers said, but the result spurred investors to return to riskier assets, such as equities.
"With the Democrats taking over the House we will now have to see what gridlock in Congress means for policy. As for the market impact, a split Congress has historically been bullish for equities and we expect to see the same pattern again," said Torsten Slok, Chief International Economist at Deutsche Bank.
"It is too early to predict where policy will go ... What matters for markets is what will happen to trade policy, healthcare policy, immigration policy and fiscal policy."
Company results announcements drove the biggest movers on the STOXX 600, with Scout24, Ahold and Vestas rising rising by between 6.2 percent and 7.6 percent after strong updates. Adidas fell 3.6 percent after the sportswear company cut its revenue target after a fall in sales in western Europe.
Weaker than expected revenue growth sent the world's biggest security firm G4S down nearly 18 percent to its lowest since August 2016 for its worst day in seven years.
BANK GAINS
Spanish banks were in the spotlight after a government move to counteract a court ruling that would have forced customers to pay mortgage stamp duty, pledging to pass a law to oblige banks to pay the tax.
Banking shares, which had rallied initially on the court ruling, came off early highs after the government's announcement but largely held gains after it became clear that the new law would not be applied retrospectively.
Shares in Caixabank Sabadell, BBVA , Santander and Bankia were up by between 1.8 percent and 4.1 percent.
"The Supreme Court decision to maintain the status quo on the mortgage tax has removed a tail risk and restored the much-needed legal security for the banks to continue operating in the long-duration business of mortgage loans," broker Alantra said in a note.
Topping the leader board were shares in dialysis care services provider Fresenius Medical Care, which rose 9.6 percent after a vote in California defeated a proposal to cap profits of dialysis clinics.
Healthcare stocks rose 1.5 percent because the results of the US midterms were seen as reducing the likelihood of legislative action to cut medical costs in the world's biggest and most profitable market.
Danske Bank jumped 6.7 percent for its biggest daily gain since August 2013 after the lender's largest shareholder ousted the chairman, the latest executive to be forced out after a money laundering scandal.