European shares hit highest close in 28 months

LONDON Jan 18 (Reuters) - European shares hit their highest close in more than 28 months on Tuesday, as euro zone finance ministers inched towards improving a rescue fund, and investor confidence grew in Germany.

The FTSEurofirst 300 .FTEU3 index of top European shares rose 0.9 percent to end the day provisionally at 1,167.59 points, the highest close since September, 2008.

Banks to gain included Spanish heavyweights Banco Santander (SAN.MC) and BBVA (BBVA.MC), up 4.1 and 5.4 percent respectively.

European finance ministers inched forward on Tuesday towards beefing up the euro zone's rescue fund and preparing new stress tests for the region's shaky banks. [ID:nL3E7CI0C4]

"Clearly the fact that finance ministers are meeting and heads of state are going to meet in March indicates that they are taking the (euro zone debt) problem more seriously than three months ago," said Richard Batty, strategist at Standard Life Investments in Edinburgh.

"There is some movement towards a resolution though it is a very long process. The market is giving some form of benefit of the doubt to that process." (Reporting by Brian Gorman)