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EUROPE: Shares close higher in Europe as loan crisis fears ease

European shares closed higher on Friday as Wall Street extended its gains on prospects of a cut in interest rates by the Federal Reserve to boost the US economy, dealers said.

The analysts added that worries over the US subprime loan crisis were easing, tempting bargain-hunters to buy shares.

Friday's gains were made "on the anticipation the Fed will cut rates, so it could derail if the central bank doesn't do what is expected of it," said Andrea Williams, European fund manager at Royal London Asset Management.

rising

In London the FTSE 100 index rose 1.31 percent to close at 6,432.50, in Paris the CAC 40 rose 1.29 percent to 5,670.57 while in Frankfurt the Dax added 1.36 percent to finish at 7,870.52.

The DJ Euro Stoxx 50 index of top eurozone shares rose 1.10 percent to 4,394.95 points.

In London on Friday, the market was buoyed by merger and acquisition (M and A) talk in the mining sector.

"Miners are being helpful -- and have been for the last few months -- with M and A potentially spreading outwards," said equities analyst Keith Bowman from Hargreaves Lansdown.

surge

Anglo American shares surged 4.19 percent to £0.0328, Vedanta Resources added 5.11 percent to £0.023 and Xstrata added 3.20 percent to £0.034.

Elsewhere in Europe, in Madrid the Ibex-35 gained 0.66 percent to 15,759.9 points and in Milan the SP/Mib index gained 0.97 percent to 38,975 points despite a national day of transport strikes.

In Brussels, the Bel 20 added 1.46 percent to 4,162.50 points and the Swiss SMI index gained 1.07 percent to 8,828.36 points.
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