European shares hit three-month highs on Fed confidence; Asian stocks finish in the green

On Thursday European stock markets reached levels last seen before China’s Black Monday crash in August. Today's rally has pushed the Stoxx 600 index of leading European shares up by 1.1%, to a three month high.

This is the reflection of the Federal Reserve’s confidence in the U.S. economy, and its guidance that future interest rate moves will depend on economic data.

German DAX surged 1.69%, while British FTSE 100 rose 1.36%. France's CAC added 1.02% and Spain's IBEX gained 1.34%. Italy's FTSE MIB rose 0.94%.

Alvin Tax, forex strategist at Société Générale bank, said (via Reuters):

"We have had an interesting FOMC minutes and risk assets have rallied across the board with the dollar weaker and EM [emerging market assets] leading the way."

"That is the success of the Fed really. We expect they will hike in December but then proceed slowly after that and that has soothed markets."

In Asia, stocks finished the session in the green after the Federal Reserve’s meeting minutes sent strong signals of a rate increase in December.

Australia’s S&P/ASX 200 finished 2.01% higher, Japan’s Nikkei Stock Average rose 1.07% and South Korea’s Kospi gained 1.33%.

Hong Kong’s Hang Seng Index rose 1.41% and the Shanghai Composite Index was up 1.36%.

Asian banks followed a rally in the U.S. financial sector, with Japanese firms Mizuho Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Nomura Holdings Inc. up 1.5% and 2.2%, respectively.

Consumer discretionary stocks in Japan were also higher, as a weakening yen would make exporters’ goods cheaper, boosting margins. Fast Retailing Co., casual-wear operator of Japan’s Uniqlo brand, rose 2.6%.