LONDON (The Deal) -- European stock indices rallied on Thursday, following Wall Street and Asia higher amid mounting optimism the Federal Reserve will be able to increase interest rates next month without roiling markets or the global economy.
Federal Reserve Open Market Committee minutes out Wednesday stated the conditions for a rate rise could "well be met" in December, while several Fed officials expressed confidence that the economy will take a modest increase in stride.
The European Central Bank is expected to move in the opposite direction next month, and minutes of its Oct. 21 to Oct. 22 meeting due out at 7:30 a.m. EST will be studied for clues on its next move.
In the U.K., October retail sales figures from the Office for National Statistics came in weaker than expected, with some observers suggesting the vogue for U.S.-style "Black Monday" promotions in November had eroded shoppers' appetites for purchases the previous month.
In London, the FTSE 100 was up 1.25% at 6,357.45 and in Frankfurt the DAX was up 1.69% at 6,357.45. In Paris, the CAC 40 gained 0.91% to 4,951.25.
Both BG Group (BRGYY and Royal Dutch Shell (RDS.A - Get Report) rose more than 2% in London after the Australian competition regulator unexpectedly cleared Shell's $70 billion purchase of the gas and oil producer without imposing conditions.
Royal Mail (ROYMF was up close to 6% after first-half results showed that progress on cost cuts had limited a decline in earnings.
BHP Billiton (BHP was up more than 3% in London. Chairman Jac Nasser told investors gathered in Perth for the company's annual shareholders' meeting that balance-sheet strength remained its priority, signalling potential curbs in dividend payments.
Irish building materials maker CRH (CRH was up about 6% in London after a third-quarter trading update confirmed strong sales growth in the U.S. and stable revenue in Europe. It said that businesses it acquired through a €5.5 billion ($5.9 billion) deal with the predecessor components of recently merged Lafarge Holcim were performing in line with expectations.
Pay-TV giant Sky was up about 1.6% after the U.K.'s communications regulator said it shouldn't have to make its main sports channels available to rival BT Group, which has poured millions into its own sports offer in recent years, at a fixed price. Ofcom said it was up to the two companies to negotiate a commercial agreement. BT rose marginally.
But discounter Poundland Group (PDLDF had slumped by more than 16% as of late morning in London after it warned of "highly volatile" third-quarter trading as it announced a 44% decline in first-half profit, with same-store sales down 2.8%.
Bovis Homes (BVHMF plunged more than 8% in London after warning that rising construction costs will eat into profit margins.
Airline Air France-KLM (AFLYY rose in Paris and Deutsche Lufthansa (DLAKY was up in Frankfurt, with both shares gaining more than 3% after a volatile week. International Consolidated Airlines Group was also up in London and Madrid.
Alpha Bank was down more than 8% in Athens at € 0.06 after completing a €1.55 billion share issue to help plug a capital shortfall identified by the European Central Bank. Alpha Bank priced the shares at €0.04.
A large majority of Asian indices posted gains on Thursday, with Sydney performing particularly strongly, with the S&P/ASX 200 closing up 2.13% at 5,242.57.
Chinese stock indices also rallied, with the Shanghai Composite closing up 1.39% at 3,617.06. In Hong Kong, the Hang Seng closed up 1.41% at 22,500.22. In Tokyo, the Nikkei 225 rose 1.07% to 19,859.81 and the Topix rose 0.87% to 1,600.38.