LONDON: European shares ended higher Wednesday after the Federal Reserve signaled that the U.S. rate-hike cycle was nearing an end.
The German DAX 30 ended up 1.2 percent at 5,523, the French CAC 40 index added 1.3 percent to 4,838 and the U.K. FTSE 100 index climbed 0.6 percent at 5,714.
U.S. stocks rallied Tuesday after the minutes of the Federal Open Market Committee's latest meeting in December showed a majority of policy makers believe the central bank need implement only a few more rate hikes.
"The minutes ... gave markets the steer that we could be very close to the top of the U.S. interest-rate cycle and that's given stock markets a further boost,'' noted Philip Shaw at Investec.
"It's a good start to the year so far ... and I think primarily there's a feeling of confidence about global growth prospects for this year.''
U.K. clothing retailer Next gained 10.3 percent after raising its 2005 pretax profit forecast.
Next's same-store sales, which fell 3.2 percent from Aug. 1 to Dec. 24, are expected to fall around 3 percent over the next six months. Still, the sales decline to Dec. 24 was better than the 5 percent decline some analysts had expected.
French engineering conglomerate Alstom jumped 8.4 percent after it agreed to exit its shipbuilding business by transferring a controlling stake to Norway's Aker Yards.
Alstom is effectively paying to dispose of the shipyards by agreeing to sell a 75 percent stake to Aker Yards for euro50 million while investing euro350 million (US$416 million) of its own cash in the new joint venture.
Also in France, car maker Renault eased 1.2 percent after saying it expects European sales volumes this year to grow slightly in competitive stable markets, while it will also continue to pursue growth outside Europe. In 2005, global sales rose 1.7 percent to 2.53 million vehicles.
French oil major Total ended down 0.3 percent and U.K.-listed BP dipped 0.5 percent after Morgan Stanley cut its ratings on the companies to underweight from equal weight. Morgan Stanley said the supermajors should underperform the industry this year.
Prudential helped insurance stocks, touching a new 3 1/2-year high amid market speculation that it could be in line for a bid from Prudential Financial of the U.S. Prudential shares finished up 2.2 percent in London.
Also in the financial-services sector, Eurex, the futures exchange owned by the Deutsche Boerse and the SWX Swiss Exchange, said it's in discussions with a "number of U.S. exchanges'' to have a partner take a stake in the company's struggling U.S. unit.
Deutsche Boerse shares eased about 0.5 percent.
Irish building-materials group CRH added 1.3 percent after it said 2005 pretax profit should rise at least 14 percent from 2004 levels, with second-half pretax profit rising about 11 percent.
Growth in the United States helped fuel the profit rise. - AP