Advances in banks and energy stocks pushed European shares 1.4 percent higher in early trade on Wednesday, placing them on track for a third successive day of gains, reported reuters. By 0932 GMT, the pan-European FTSEurofirst 300 index of top European shares was up 1.4 percent at 796.64 points. Investor focus was on the outcome of a U.S. Federal Reserve meeting due at 1915 GMT. The central bank has already slashed interest rates to nearly zero and is looking for other tools to revive economic growth. "There are some hopes the conclusion of the FOMC meeting this evening is going to give us further details on what is happening with U.S. quantitative easing and what ever plans there may be for the proposed bad bank," said Jim Wood-Smith, head of research at Williams de Broe. Banks were the biggest gainers on the index. Lloyds Banking Group soared 27.4 percent as Citigroup said the risk of nationalisation of the group is fully factored into the share price. BNP Paribas was 10.7 percent higher following news that Fortis Holding had reopened talks with the Belgian government and BNP Paribas over the sale of Fortis assets after a panel of experts recommended doing so. HSBC, UBS, Credit Suisse and Banco Santander were up 2.9-6.5 percent. "There is also short position closing in financials. Since the lifting of the short ban particularly in the UK there have been some substantial short positions taken out which are now being squeezed," said Wood-Smith. "The statement from Barclays on Monday appears to be the trigger for a lot of investors to say this trend looks like it's going as far as it's going to for the time being and we need to get out of here. The more the price goes up investors have to close their shorts," he added. Barclays said on Monday it did not need to raise fresh capital and that it had got off to a good start in 2009. Insurers were also big gainers on the index. Axa, Allianz and Munich Re were up 2.1-4.2 percent. Across Europe, the FTSE 100 index was up 1.2 percent, Germany's DAX was 2.2 percent higher and France's CAC 40 was up 1.8 percent.
