(MENAFN- AFP) European stock markets rebounded Thursday, hopping onto the coattails of a global rally after the Federal Reserve suggested a likely US interest rate increase in December on growing economic confidence.
Heightened security fears in the wake of the Paris terror attacks and caution ahead of an update from the Federal Reserve had pushed European markets lower on Wednesday.
But they rebounded first on Wall Street on Wednesday and then across Asia and Europe on Thursday after the release of minutes from the US central bank.
Frankfurt's DAX 30 stocks index was up 1.0 percent in afternoon trading, while the Paris CAC 40 won 0.2 percent compared with Wednesday's close.
Outside the eurozone, London's benchmark FTSE 100 index was up 0.8 percent.
"Clearly the removal of the uncertainty around the US rate hike is seen as being far more preferable to investors than keeping them at record lows for a little longer," said Craig Erlam, senior market analyst at Oanda trading group.
"Everyone may not be in agreement that rates should rise but there is a general acceptance now that it's happening and the market seems capable of dealing with it."
Minutes from the Fed's October 27-28 monetary policy meeting showed most officials expect a rate hike in December and have moved past worries about slowing global growth that had prevented a hike in September.
- Market overcoming rate 'hysteria' -
Fed chief Janet Yellen had said earlier in the year she expected an increase by 2016 but a hike was put off several times during the summer as world markets were hammered by worries about China and the global outlook.
But a string of figures out of Washington recently -- particularly on jobs growth and price rises -- coupled with an uptick on equities markets, has reignited confidence at the Fed to lift rates for the first time in nine years.
"In reality, the economy is performing more than well enough to cope with a small rate increase from the current record low levels and it's good to see that the market is moving on from the hysteria surrounding it. The path of rate hikes is far more important than the first," Erlam added.
Also, a number of Fed policymakers were concerned that, having built up expectations of a hike for so long, not moving would send a disturbing message and erode the bank's credibility.
Delaying a rise "could increase uncertainty in financial markets and unduly magnify the perceived importance of the beginning of the policy normalisation process," the minutes said.
The outlook for a US rate hike boosted the dollar, although the euro rebounded to $1.0729 after hitting a seven-month low at $1.0617 on Wednesday.
The stocks rally halted on Wall Street at the opening of trading on Thursday, with the Dow slipping nearly 0.2 percent as a profit warning from UnitedHealth Group sent the blue-chip index lower.
Key figures around 1430 GMT
London - FTSE 100: UP 0.8 percent at 6,328.56 points
Frankfurt - DAX 30: UP 1.0 percent at 11,071.21
Paris - CAC 40: UP 0.2 percent at 4,918.16
EURO STOXX 50: UP 0.5 percent at 3,448.40
Tokyo - Nikkei 225: UP 1.1 percent at 19,859.81 (close)
New York - Dow: DOWN 0.2 percent at 17,708.03
New York - S&P 500: DOWN 0.03 percent at 2,082.93
New York - Nasdaq: UP 0.07 percent at 5,078.55.
Euro/dollar: UP to $1.0729 from $1.0660 in late US trade on Wednesday.
Dollar/yen: DOWN to 122.87 yen from 123.59 yen
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