European stocks climb on upbeat Fed outlook

Europe's main stock markets advanced on Wednesday, lifted by strong gains elsewhere, with sentiment boosted after the US Federal Reserve gave a bullish economic outlook, analysts said. London's benchmark FTSE 100 index of leading shares climbed 0.36 percent to 5,977.64 points and in Paris the CAC 40 gained 0.76 percent to 3,577.19 points approaching the half-way mark. Frankfurt's DAX 30 rallied 1.18 percent to 7,078.36 points, as investors also digested results from pharmaceuticals and chemicals giant Bayer and power supplier E.ON. In foreign exchange trade, the European single currency dipped to $1.3066 from $1.3075 late in New York on Tuesday. The US central bank held interest rates at record lows on Tuesday and upgraded its view of the world's number one economy, saying the jobs market and consumer and business spending had improved since January. The assessment sent Wall Street's Dow index soaring to the highest level for more than four years, as investors also reacted to news that top US banks had passed crucial stress tests. While acknowledging it was still facing problems the Fed said: "Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated." "Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook." Markets were also bolstered by news that US retail sales rose 0.4 percent in January from December. That was the biggest gain since October. The Dow Jones Industrial Average jumped 1.68 percent to 13,177.68 points -- its best finish since December 31, 2007. "US retail sales and a an upbeat outlook from the Fed on Tuesday has fuelled the hunger of buyers" of shares, said broker Owen Ireland at Valbury Capital. In German company news, E.ON saw its shares surge 6.24 percent to 18.14 euros after stressing that the group was "past the worst" after the difficult business environment pushed it deeply into the red last year. Germany's biggest power supplier said in a statement it booked a net loss of 2.219 billion euros ($2.9 billion) in 2011, compared with profit of 5.853 billion euros a year earlier. Bayer's share price meanwhile dipped 0.68 percent to 55.26 euros, despite forecasting strong growth in its key pharmeuticals and agrochemicals divisions in the next few years. Elsewhere, most of Asia also experienced a Fed-inspired bounce. Tokyo jumped 1.53 percent to close above 10,000 points for the first time since July -- while Sydney gained 0.93 percent and Seoul rose 0.99 percent. However, Hong Kong and Shanghai gave up their early gains to end in negative territory after Chinese Premier Wen Jiabao warned of a risk of a property bubble, denting hopes of an easing of tight real estate rules.