European leaders plan to meet not once, but twice, over the next week -- which investors took as an indication that they must be about to take serious action on resolving the region's sovereign debt crisis.
Britain's FTSE 100 rose 0.6 per cent, France's CAC 40 rose 0.6 per cent and Germany's DAX gained 0.5 per cent. Japan's Nikkei closed flat, while Hong Kong's Hang Seng rose 0.2 per cent.
Dow stock futures rose 32 points, or 0.3 per cent, to 11,504, while S&P 500 futures edged 4 points, or 0.3 per cent, higher.
The rise came after France and Germany said a comprehensive euro zone debt deal was on its way. European leaders are set to meet on Sunday as well as on Wednesday to work out how to maximise the bloc's financial rescue fund and how to reduce Greece's debt. The second summit was scheduled to give German Chancellor Angela Merkel some time to secure parliamentary support for any measures.
Germany and France have so far remained far apart on what steps to take. Sources told Reuters European banks will be asked to increase their core tier-one capital ratio to 9 per cent to help them withstand losses on sovereign debt. The EFSF bailout fund may also guarantee a portion of potential losses on new euro zone bonds to try to restore market confidence and convince investors that Italian and Spanish bonds are safe to buy.
European governments may unleash as much as $1.3-trillion (U.S.) to fight the debt crisis, according to Bloomberg News.
The euro dipped to $1.3757.
Gold gained $13.10 to trade at $1,626 an ounce.
U.S. crude oil rose 25 cents to $86.32 a barrel.
Three-month copper rebounded 3.9 per cent to $6,995.50 a tonne, after tumbling nearly 7 per cent for its largest one-day collapse in four weeks in the previous session.
The Canadian dollar traded around 98.60 U.S. cents.