European shares rise post Fed

European shares rose more than one per cent by midday, boosted by the prospect of rate cuts in the United States, with financials also lifted by consolidation talk around ING and a brokerage upgrade for insurers.

Mining stocks gained as the price of copper rose, and the auto sector benefited from bid talk around French car parts group Valeo and that DaimlerChrysler was nearing a sale of troubled US unit Chrysler.

The Federal Reserve kept interest rates steady on Wednesday but dropped earlier language about future tightening, prompting widespread expectation that key US rates may actually be cut. At 1118 GMT, the FTSEurofirst 300 index of top European shares was up 1.14 per cent at 1,509.69 points, taking its gains over the past six days to nearly 6 per cent.

European shares tracked a rise in US shares that featured the S&P 500 notching up its biggest percentage gains in eight months, and Japanese stocks, which rose to a three-week closing high.

"It does have the feel now that the stock sell-off is over," said Patrik Schowitz, global strategist at HSBC.

"People are clearly more concerned about interest rates than growth. We're not going to see more out of the Fed unless growth disappoints massively or inflation rises strong."