(MENAFN- Gulf Times) Europe's main stock markets rebounded yesterday, taking a step back from geopolitical tensions to refocus on economic and corporate news.
The region's equities had fallen on Tuesday with airlines and hotel groups hit by a US travel warning and the downing of a Russian fighter jet by Turkey.
While Asian markets retreated, mirroring a sell-off in tourism-linked firms in the US overnight, the sector helped to lift European bourses, Thomas Cook notably advancing 11.4% on its first annual net profit for five years, more than overturning 7% losses over two previous sessions.
Russo-Turkish tensions in the wake of the jet downing sent oil prices up on concern about supplies in the crude-rich Middle East region but failed to make a fresh dent in European equities.
"European equities are positive," said Accendo Markets analyst Mike van Dulken.
At the close, London's benchmark FTSE 100 index had risen 1%, as a British government budget update announced fresh public spending cuts while shelving a plan to cut welfare payments for the poorest and sparing the police from savings after the Paris attacks
In the eurozone, Frankfurt's DAX 30 closed up 2.2% with Volkswagen and Allianz leading the gainers € both adding almost 4%, while the Paris CAC 40 index was also up 1.4% compared with Tuesday's close, while Milan gained 1.1%.
European markets rose "after the escalation of tensions between Russia and Turkey proved short-lived", noted Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
In foreign exchange activity, the euro nudged down to $1.0582 as Capital Economics speculated that "the prospect of a historically large divergence between US and eurozone monetary policy looks set to push the euro below parity versus the US dollar for the first time since late 2002."
Earlier yesterday, Turkish President Recep Tayyip Erdogan sought to play down tensions with Russia after Turkey's downing of the Russian plane sparked fears among NATO allies of a wider conflict.
Despite those concerns, traders took heart from a Standard and Poor's report which found "the latest indicators show that stronger domestic demand is overcoming soft exports, which suggests that the eurozone upturn continues to forge ahead."
The ratings agency added that consumers in the eurozone had provided "a welcome boost" to growth, especially in Germany, while detecting that shoppers were starting to spend more elsewhere, too.
British homebuilders headed FTSE 100 risers.
The sector won a major boost as finance minister George Osborne prepared to unveil a scheme to build 400,000 new homes deemed by the government to be affordable.
Ahead of the update, homebuilders Taylor Wimpey and Persimmon surged by more than 6% in value before settling at mid-afternoon rises of around 3.4%.
US stocks were ahead, just barely, on mixed jobless and spending data in the last trading session ahead of the Thanksgiving holiday.
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