EUROPE MARKETS: European Stocks Rise In Fed-fueled Rally

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets moved higher on Thursday, after minutes from the U.S. Federal Reserve's latest policy meeting showed many members think asset purchases will likely be needed in 2014.

The Stoxx Europe 600 index climbed 0.6% to 296.58, on track for a fourth straight day of gains.

"Markets interpreted the Fed minutes as a dovish message and acted accordingly. I'm not entirely sure we're not getting ahead of ourselves here, because it was actually not very different from what we've heard in the past," said Peter Dixon, strategist at Commerzbank in London.

"The U.S. is doing okay and getting momentum behind it. Maybe growth in the second quarter won't be as dramatic as some had hoped for, but all in all, the economy is getting back on its feet. At this stage, the Fed just doesn't want to pull the rug from the under the table, because it could cause problems, but they are saying: 'Be aware, at some point we'll take the rug away'," he added.

Among the biggest movers in the pan-European index, shares of Associated British Foods PLC picked up 3.9% after the ingredients maker and owner of Primark clothing stores said revenue for the 40 weeks to June 22 was up 9%.

Shares of Telekom Austria AG added 2.2% after Goldman Sachs lifted the firm to neutral from sell.

Fed minutes, Bernanke steal the spotlight

More broadly, investors looked to the U.S., where the latest news from the Fed fueled a global rally. Minutes from the Fed's latest policy meeting showed that about half of its 19 senior officials said they would like to end the central bank's monthly purchase of $85 billion in bonds by the end of the year, while many could see a need for continued easing next year.

"This division is acting as a catalyst to optimism, as it at least keeps the debate open as to whether the U.S. economy is strong enough to cope with a reduction in stimulus measures," said Shavaz Dhalla, financial trader at Spreadex, in a note.

"Furthermore, officials indicated that there needed to be an improvement within the labor market before contemplating the slowing-down of quantitative easing," he said.

Additionally, Fed Chairman Ben Bernanke stressed in a speech to economists that short-term interest rates will stay low, even if the unemployment rate falls below the 6.5% threshold. The jobless rate was 7.6% in June.

U.S. stock futures pointed to a higher open on Wall Street.

Among country-specific indexes in Europe, Germany's DAX 30 index picked up 1.2% to 8,167.15.

Banks posted some of the biggest gains, with Commerzbank AG up 1.9% and Deutsche Bank AG 1.3% higher.

France's CAC 40 index gained 0.9% to 3,875.66 and the U.K.'s FTSE 100 index put on 0.6% to 6,545.88.

Miners rallied in London, as most metals prices moved north. Shares of Anglo American PLC gained 4.8%, Rio Tinto PLC (RIO) put on 4.7% and BHP Billiton PLC (BHP) added 4.5%.

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