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European stocks end higher, FTSE 100 up 2pc, Frankfurt DAX 30 soars 2.8%

European stocks end higher, FTSE 100 up 2pc, Frankfurt DAX 30 soars 2.8%

LONDON: Global stock markets surged in a “Santa Clause rally” as traders welcomed the effect of the US Federal Reserve meeting which indicated an interest rate increase was not imminent.
In Europe, London’s benchmark FTSE 100 index closed up 2 per cent to 6,466 points as investors welcomed British retail sales rising strongly in November as shoppers snapped up bargains.
Among other European exchanges, the Paris CAC 40 jumped 3.4 per cent to 4,249.49 points, while in Frankfurt the DAX 30 was up 2.8 per cent to 9,811.06 points.
Germany’s outlook was boosted by data showing business confidence in Europe’s biggest economy rose again in December.
Markets are “awash with positivity, following oil’s creep above $US60 per barrel, the US Fed showing faith in the US economy, and the Swiss Central Bank slashing its interest rates”, Connor Campbell, analyst at traders Spreadex, said.
The Fed on Wednesday left its key interest rate, the federal funds rate, at the 0-0.25 per cent level, where it has been for six years to help the US emerge from deep recession.
The US central bank left in place market expectations that it may begin raising interest rates only in the middle of 2015, downplaying speculation that a hike might come earlier because of the strength of the US economy.
The outcome of the meeting stoked talk of a “Santa Clause rally”, and US traders continued to be in a festive mood on Thursday.
In midday trading, the Dow Jones Industrial Average stood at 17,618.75, up 1.5 per cent. The broad-based S&P 500 rose 1.5 per cent to 2,043.75, while the tech-rich Nasdaq Composite Index gained 1.6 per cent to 4,716.51.
Asian markets also mostly rallied, with investors reversing a recent sell-off.
Early gains in oil prices were however later wiped out as concerns over a supply glut persisted.
US benchmark West Texas Intermediate for January delivery fell US40c to $US56.07. Brent North Sea crude for February dropped US60c to $US60.58 per barrel.
A fresh drop in oil prices earlier this week had sparked turmoil on global stock markets where investors were concerned about the effect on oil firms as well as the crude-dependent economy of Russia.