Frankfurt's DAX 40 rose 0.3% to around 25,520 on Wednesday, its highest level since July 6, as investors awaited the US Federal Reserve's policy decision due after the European market close while digesting fresh earnings and higher oil prices.
Semiconductor stocks remained under pressure, with Infineon falling another 1% after Tuesday's 6% drop, amid concerns over stretched valuations, stronger Chinese competition, and rising investment needs.
Among individual movers, Deutsche Bank jumped 4% after reporting stronger-than-expected second-quarter earnings, driven by record profits in its investment banking division.
RWE gained more than 3% following better-than-expected first-half results, while BASF advanced 2% after announcing a new share buyback program.
Meanwhile, oil prices surged more than 3%, supported by renewed geopolitical tensions in the Middle East and a larger-than-expected drawdown in US crude inventories, adding to concerns over inflationary pressures in Europe.