The FTSEurofirst 300 index of top European shares was up 0.3 percent at 1,080.44 points at 0947 GMT, having hit a session high at 1,081.47 after better-than-expected German IFO figures.
"Some of the numbers that have been coming across the screen have looked good in terms of expectations," said Andrea Williams, who manages $2.1 billion for Royal London Asset Management, adding it would help the market.
The better corporate earnings helped the Euro STOXX 50 volatility index, Europe's main gauge of equity market investor anxiety, fall 2.7 percent to a seven-month low, suggesting investor risk appetite was improving -- the lower the volatility index, based on options on Euro STOXX 50 stocks, the higher is investor appetite for risky assets such as equities.
Royal Bank of Scotland rose 3.6 percent, with brokerage Seymour Pierce saying: "We continue to believe that RBS core retail and commercial bank is worth at least 40 pence per share, which gives enough upside to justify our 'buy' recommendation."
Natixis jumped 6.7 percent to be the top blue-chip gainer after forecast-beating results.
Disappointing results from Commerzbank and Credit Agricole left them to dominate the loser board.
"It is early days, banks have been deleveraging their balance sheets to give them a stronger capital ratio, which is the right thing, although it will mean lower returns in the longer-term," Williams said.
Commerzbank fell 3.7 percent after quarterly earnings were hit by Greek writedowns and it said euro zone worries will continue to be a threat. Its mortgage lender Eurohypo also weighed on results.
French bank Credit Agricole lost 2.9 percent after quarterly results missed forecasts due to the Greek debt crisis, while bailed out Franco-Belgian bank fell 3.3 percent as it said it risked going out of business following results. {ID:nL5E8DN0BL]
Of companies that have reported earnings this season, 49 percent have either beaten or met forecasts and 51 percent have missed, according to Thomson Reuters StarMine data.
The next resistance level for the FTSEurofirst 300 index was seen at 1,113.73 -- a figure it reached in July before a sell-off.
Traders said they expected money to continue to flow into equities if corporates continued to show signs of improvement, while dividend yields on major exchanges also made stocks attractive.
The Euro STOXX 50 trades at a dividend yield of 4.15 percent, compared with its 10-year average of 3.1 percent and the 1.91 percent yield on 10-year German Bunds
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