European stock markets rallied on Wednesday and Wall Street extended gains as investors took heart in strong earnings reports from Coca-Cola and other consumer-oriented companies.

After slumping early this week, Wall Street bounced back on Tuesday and traders kept the momentum going, bolstering sentiment in London and on the continent.

"A bumper rebound for US stocks has fed through to Europe," noted Joshua Mahony, senior market analyst at IG trading group.

Comments from Coca-Cola and other groups that depend on consumption "helped temper some of the slowdown concerns that were reportedly behind Monday's selling," Briefing.com analyst Patrick O'Hare added.

All three major US indices advanced, with the S&P 500 climbing 0.8 percent after European bourses jumped more than one percent.

Also read: US records biggest annual inflation jump since August 2008

Edward Moya, a market analyst at the online brokerage Oanda, said: "This round of earnings covered many sectors and was fairly impressive.

"The remaining second-quarter results look like they will also come in strong and show that peak earnings growth expectations did not disappoint."

For Fawad Razaqzada, an analyst at ThinkMarkets: "The key question is whether this is the start of a rally to new highs, or will investors see this as an opportunity to exit" and lock in profits.

In commodities trading, oil prices shot higher, rebounding from hefty losses earlier in the week following an agreement of the OPEC+ producers to boost output.

The euro was mixed, rising against the dollar but retreating against the pound ahead of a European Central Bank monetary policy announcement Thursday.

Kathy Lien of BK Asset Management warned that the euro could rally on Thursday if the tone from the bank surprises.

"Everyone expects the ECB to maintain their dovishness especially after they tweaked their inflation target, but the relatively minor declines in EUR/USD this month suggests that sellers may be exhausted," Lien wrote.

"This poses a risk for anyone anticipating" further losses in the euro against the dollar, she said, adding that the European currency could jump should ECB Chief Christine Lagarde suggests reducing asset purchases could come more quickly than expected.

New York - Dow: UP 0.8 percent at 34,798.00 (close)

New York - S&P 500: UP 0.8 percent at 4,358.69 (close)

New York - Nasdaq: UP 0.9 percent at 14,631.95 (close)

London - FTSE 100: UP 1.7 percent at 6,998.28 (close)

Frankfurt - DAX 30: UP 1.4 percent at 15,422.53 (close)

Paris - CAC 40: UP 1.9 percent at 6,464.48 (close)

EURO STOXX 50: UP 1.8 percent at 4,026.68 (close)

Tokyo - Nikkei 225: UP 0.6 percent at 27,548.00 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 27,224.58 (close)

Shanghai - Composite: UP 0.7 percent at 3,562.66 (close)

Euro/dollar: UP at $1.1801 from $1.1781 at 2100 GMT

Pound/dollar: UP at $1.3708 from $1.3628

Euro/pound: DOWN at 86.00 pence from 86.45 pence

Dollar/yen: UP at 110.28 yen from 109.85 yen

Brent North Sea crude: UP 4.2 percent at $72.23 per barrel

West Texas Intermediate: UP 4.3 percent at $70.30 per barrel