European stocks remain sharply higher, sentiment recovers; Dax up 1.42%

European stocks remained sharply higher on Tuesday, as concerns that the Federal Reserve coud taper its bond buying program before the end of the year began to ease, boosting market sentiment. 

During European afternoon trade, the EURO STOXX 50 rallied 1.18%, France’s CAC 40 gained 1.26%, while Germany’s DAX 30 jumped 1.42%. 

On Monday, Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, said the central bank was committed to continuing its bond purchase program until the U.S. unemployment rate falls further.

Dallas Fed President Richard Fisher also downplayed market jitters over tapering as overdone.

Global stocks had weakened after Fed Chairman Ben Bernanke said last week that the bank could begin slowing asset purchases by the end this year if the economy continues to pick up. 

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale surged 2.08% and 1.26%, while Germany's Deutsche Bank climbed 1.46%. 

Peripheral lenders added to gains, with Spanish bank Banco Santander ans BBVA rallying 0.83% and 1.28%, while Italy's Intesa Sanpaolo advanced 0.64%. 

Elsewhere, Peugeot soared 5.50% after Europe’s second-largest carmaker said it has received more than 26,000 orders in Europe for the 2008-model crossover. 

In London, FTSE 100 jumped 0.88%, as U.K. lenders continued to track their European counterparts higher. 

Shares in the Royal Bank of Scotland climbed 1.25% and Lloyds Banking rallied 1.42%, while HSBC Holdings and Barclays surged 2.52% and 1.47%. 

Mining stocks also remained on the upside, as BHP Billiton and Rio Tinto gained 0.99% and 1.23% respectively, while Vedanta Resources jumped 1.95%. 

Adding to gains, ARM Holdings soared 3.63%, even as Investec upgraded the company to "buy" from "hold", citing the stock’s recent decline. 

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.48% increase, S&P 500 futures signaled a 0.52% climb, while the Nasdaq 100 futures indicated a 0.59% gain. 

Later in the day, the U.S. was to release official data on durable goods orders and reports on home sales and consumer confidence.