Metro was in high demand after the German retailer received a vote of confidence from Morgan Stanley analysts for the first time in nearly a decade.

“Given margins troughing at Metro, likely improvement in cash-and-carry and potentially material corporate activity, we believe risk on Metro shares is solidly skewed to the upside,” Morgan Stanley analysts wrote in a note published on Tuesday.

They upgraded their rating from “neutral” to “overweight” and moved their price target on the shares from €23 to €33 a share.

Metro gained 10.3 per cent to €27.34 while Frankfurt’s Xetra Dax rose 0.7 per cent to 8,530.89.

Late in the afternoon, Carrefour jumped on news that the French retailer was in advanced talks to divest its 25 per cent stake in Majid Al Futtaim.

It is expected to pocket $400m-$500m from the owners of MAF, Reuters reported, citing sources.

Its shares climbed 4.7 per cent to €24.42 against a 0.4 per cent gain on the Paris CAC 40 index to 4,051.11. The FTSE Eurofirst 300 finished in positive territory, up 0.2 per cent to 1,256.28.

Ben Bernanke, Federal Reserve chairman, helped to underpin the day’s gains across much of Europe with dovish testimony to the US Congress.

Pharmaceutical stocks were in high demand as Merck and Roche raced to the top of the Eurofirst leaderboard.

Frankfurt-listed Merck rose 3.4 per cent to €123.50.

In Zurich, Roche gained 3 per cent to SFr258.5. The Swiss SMI index closed up 1.1 per cent to 8,407.61

Danish lender Danske Bank profited from an upgrade by analysts at Carnegie.

The Swedish broker raised its outlook on the shares from “hold” to “buy”. Danske stock rose 3.2 per cent to DKr106.30.

Italian grid operator Terna was one of the worst performing stocks, sliding 3.4 per cent to €3.36.

Its shares came under pressure as UniCredit sold a 5.4 per cent stake in the group through a share placement on behalf of Italian investors.

The shares were placed at €3.35 per share.

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