The pan-European STOXX 600 index was up 0.3 percent, holding near 20-month highs, while Germany's benchmark DAX index rose 0.7 percent to hit a fresh all-time high.

European banks were top gainers, rising 1.3 percent after lender HSBC jumped more than 3 percent. HSBC posted a better-than-expected first-quarter profit and capital position.

"Overall we view this as a positive set of results ... with potential to place upward on our own and consensus forecasts," Gary Greenwood, analyst at Shore Capital Markets, said in a note.

Likewise a decision by the U.S. Federal Reserve to keep interest rates on hold also helped the sector, as banks benefit from a higher interest rate environment.

Oil & gas stocks were also firmer, up 0.9 percent following robust updates from both Statoil and Royal Dutch Shell, which both rose 2.4 percent.

"We have seen a sharp recovery in profits and strong cash flow from Royal Dutch Shell this quarter," said Simon Gergel, UK equities CIO at Allianz Global Investors.

"The company has generated sufficient cash to cover capital expenditure and the full cost of dividends ... This provides further reassurance about the benefits of the BG deal to the group’s cash flow and the sustainability of the company’s dividends.”

Results also boosted shares in brewer AB InBev and Austrian engineer Andritz, which were among top STOXX 600 gainers.

European autos was another bright spot, with the sector gaining 0.9 percent, led by a 2.2 jump in Rheinmetall after the German defence and automotive group reported a 61 percent rise in first quarter earnings.

Swedish biometric firm Fingerprint Cards was the biggest STOXX faller, however, sinking more than 12 percent after an underwhelming first quarter report.

Fingerprint's operating profit slumped 88 percent, coming in well below expectations, weighed down by excess inventories.

British retailer Next was also under pressure, dropping almost 6 percent after cutting the top end of its full-year profit guidance.

On a sectoral level, European mining firms saw some weakness as copper, aluminium and gold prices sagged, weighing on shares of aluminium producer Norsk Hydro, Centamin and Anglo American.

Overall, the macro picture is looking brighter for Europe - a survey showed that euro zone businesses began the second quarter by turning out their best performance in six years.

Likewise the first quarter earnings season has been strong for European firms so far, 43 percent of which have reported figures. Of those firms, around 74 percent have beaten earnings expectations, while 82 percent have beaten on revenue according to Thomson Reuters data.

(Reporting by Kit Rees, Editing by Helen Reid and Jon Boyle)

By Kit Rees