European shares rose early today, driven by the bank sector where Royal Bank of Scotland shares gained more than 3 per cent after an industry source said it was set to announce a rights issue next week.
RBS shares were the top positive weight on the broader European market, as analysts interpreted a possible rights issue as a positive sign for the sector, which has been wracked by concern about losses linked to the U.S. housing market.
The FTSEurofirst 300 index of top European shares was up 0.7 per cent at 1,303.97 points by 0712 GMT. Advancing issues outnumbered decliners by about seven to one.
Results from Citigroup, the largest US bank, are due later today.
Other bank stocks rose. Societe Generale, Barclays and BNP Paribas all gained between 1.4 and 2.4 per cent.
Rio Tinto shares were the largest drag, falling 1.3 per cent on market speculation BHP Billiton will not raise its bid for the company, traders said.