European Stock Market News - European Shares Rose

European stocks firm, dollar near two-and-a-half-month highs as Fed revives Dec hike talk

Europe Shares Rise

European shares rose, while the U.S. dollar stood near 2 1/2 month highs against the euro on Thursday, after the Federal Reserve gave a vote of confidence to the U.S. economy and revived expectations it may raise interest rates by year-end.

The Fed, which kept its rates on hold as expected, took the unusual step of strengthening its language about timing in its statement, bringing a December rate hike back on the table.

In another hawkish tilt, the Fed also took out a warning about slowing global growth, going against earlier speculation that China's cooling economy could delay a rate hike in the United States. 

The pan-European FTSEurofirst 300 index .FTEU3 was up 0.3 percent at 1,489.45 points by 0811 GMT, while Japan's Nikkei share average .N225 gained 0.2 percent to close at 18,935.71.

That came after Wall Street ended a volatile session with solid gains, underpinned by the Fed's vote of confidence in the U.S. economy. The Fed's relatively upbeat stance came despite recent worries about global growth due to a slowdown in China.

In overnight trade, U.S. Treasury yields and the dollar rose while shares initially sold off and then reversed, after the Fed explicitly referred in its statement at the end of its two-day policy meeting, to conditions necessary "to raise the target range at its next meeting." Reference to a particular meeting is rare for the Fed.