European stocks surged higher on Wednesday, rebounding from this week's 3-month lows, as lawmakers in Greece have voted for painful austerity measures. The budget reforms are expected to save the country from facing a potentially disastrous default on its financial obligations.
The EU and IMF are expected to make a 12 billion euro ($17.3 billion) tranche of aid available this weekend.
Stocks came off their early highs after the vote, as investors sold the news. "Expectations met, not more," said market strategist Robert Halver of Baader Bank.
Still, gains were notable and widespread around Europe.
The Euro Stoxx 50 index of euro zone blue chippers rose 1.89 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.47 percent.
Around Europe, the German DAX gained 1.74 percent, France's CAC 40 is added 1.88 percent, the U.K.'s FTSE 100 rose 1.54 percent and Switzerland's SMI moved up 1.65 percent.
Banks extended their gains from the previous session amid hopes they would bear little of the burden associated with the bailout.
BNP Paribas, Societe Generale and Commerzbank were among the prominent gainers. Europe's largest insurer Allianz rose over 3 percent after Morgan Stanley upgraded the stock to 'overweight'.
Commodities producer shares were boosted by rising prices for most metals and energy products.
Antofagasta climbed 4.6 percent following upbeat comments by its CEO Jean Paul Luksic that there is "huge demand" for metals from China and other emerging markets.
Oil companies Eni and Total rose around 2 percent.
Rolls-Royce meanwhile jumped 3.6 percent to 635 pence after announcing a $1 billion order from Singapore Airlines.
Glencor was given a "buy" recommendation at Citigroup. Shares were flat.
Commerzbank cut its target price for UBS to 17 Swiss francs. However, UBS rose 1.4 percent along with the rest of the Swiss banking sector.
In Switzerland, Zurich Financial CFO Dieter Wemmer is leaving the company by the end of the year, and shares were up 1.1 percent.
Actelion said a $577 million provision for the Asahi Kasei litigation may lead to a 2011 U.S. GAAP operating loss. Analysts say the dispute will be settled at a lower payment. Actelion shares were up more than 3 percent.
U.K. regulators have rejected Roche's Tarceva pill for long-term use in lung cancer patients who have had treatment to stabilize their disease.
However, studies showed that diabetics taking Lucentis had significant and sustained vision improvement compared with those who received a placebo. Roche shares were up 1.3 percent.
France's Christine Lagarde has officially been selected as the new head of the International Monetary Fund, becoming the first woman to lead the organization.
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