European shares rose to their highest level in more than four months on Tuesday, as firmer oil stocks and a surge in telecoms group Nokia offset a slump in UK bank Standard Chartered after becoming embroiled in a scandal.

As a result, The FTS Euro first 300 index closed up 0.8 percent at 1,094.19 points, while the Euro STOXX 50 index rose 1.7 percent to 2,440.24 points. Spain’s benchmark IBEX stock market index rose 1.4 percent, while France’s CAC and Germany’s DAX closed up 0.8 per cent and 0.5 per cent respectively.

On the flip side, U.S. stocks surged for a third straight day on Tuesday, pushing the S&P above 1,400 for the first time since early May, on growing optimism the European Central Bank would act soon to contain the euro zone’s debt crisis. Hopes for fresh policy actions to help debt-market strugglers Spain and Italy buoyed the market sentiment. Since then, good news from Greece and declines in borrowing costs for Spain and Italy from peaks above 7 percent have kept sentiment positive.

However, summer holidays have added to light trading volume, which has contributed to volatility. Tuesday’s advance was led by stocks in cyclical sectors like energy, materials and consumer discretionary, while defensive sectors like telecoms and utilities edged lower.

Cheering the news, the Dow Jones Industrial Average gained 51.09 points, or 0.39 percent, at 13,168.60 at the close. The Nasdaq Composite Index ended up 25.95 points, or 0.87 percent, at 3,015.86 and Standard & Poor’s 500 Index rose 7.12 points, or 0.51 percent, to 1,401.35.