Global stocks rebounded following a better than expected start to the corporate earnings calendar in the United States from traditional debutant Alcoa.

The region-wide FTSE Eurofirst 300 benchmark snapped a three-day losing streak and gained 7.78 points, or 0.67 percent and was quoted at 1,167.98 by the end of European trading. Britain's FTSE 100 added 45 points, or 0.74 percent thanks to strong gains for mining and banking stocks that took the benchmark to a 6,098.65 close, the highest level in more than four and a half years.

Big movers within the session included J Sainsbury plc, whose shares fell more than 2 percent even after it said it had record sales over the key Christmas period but warned of a challenging market for British retailers in the months to come.

The UK's second-largest grocery store chain said like-for-like sales grew by 1.5 percent in the 14 weeks ending on 5 January, the company said in a trading update published on its website. Excluding fuel, the sales advanced 0.9 percent. Total sales for its fiscal third quarter rose 3.9 percent, the company said, maintaining a pace of 32 consecutive quarters in which the company has grown its top line.

In New York, the Dow Jones Industrial Average ended the day 62.28 points higher at 13,391.13 while the broader S&P 500 gained 3.89 points, or 0.27 percent, to end at 1,461.04. The Nasdaq closed 0.24 higher to take the tech benchmark to 3,105.77 finish.

The bullish tone in Europe followed a solid session in Asia which was largely driven by fourth quarter earnings figures from Alcoa. The world's biggest aluminium producer posted a street-beating $5.9bn in three-month revenues and met investor expectations with a bottom line of $0.06 per share.

Here in Europe, Germany's Economy Ministry said industrial production rose 0.2 percent in the month of November, the first advance in four months and a rebound from the revised 2 percent slump in the previous month.

In the bond market, Germany sold €4.1bn in new five year government debt that drew bidding interest of €1.8 for each €1 for sale despite the miserly 0.5 percent annual coupon. UK Gilt yields extended their two day rally, taking the 10-year benchmark to 2.02 percent - fully 10 basis points below the 8-month high the paper hit last week.