(MENAFN- AFP) Europe's leading stock markets rallied Wednesday, largely clawing back the previous day's heavy losses, as traders welcomed the Republican victory in the US midterm elections.
London's benchmark FTSE 100 index climbed 1.07 percent compared with Tuesday's closing value to stand at 6,523.14 points in afternoon trading.
Frankfurt's DAX 30 shot up 1.59 percent to 9,312.34 points and in Paris the CAC 40 won 1.50 percent to 4,192.22.
European markets had fallen sharply on Tuesday after the European Union slashed its economic forecasts for the eurozone, while the energy sector sank on plunging oil prices.
On Wednesday, the dollar rallied against the euro and yen, gold prices dived to a fresh four-year low and crude oil futures also initially continued their plunge.
Markets brushed off news of sliding retail sales across the eurozone.
The dollar rallied against major rival currencies after Republicans took control of the Senate from Democrats overnight, which many investors hope might result in more business-friendly policies.
The result is a stinging setback for US President Barack Obama and his fellow Democrats for the last two years of his presidency.
"Last night's win for the Republicans in the US mid-term elections has left Obama as a lame duck president and sent the greenback soaring," said analyst Tony Cross at brokers Trustnet Direct.
"Because the commodity prices are in dollars, any appreciation of the dollar has a corresponding depreciation on the commodity price," he noted in reaction to tumbling gold and oil prices.
In foreign exchange, the euro slid to $1.2493 from $1.2545 late in New York on Tuesday.
The dollar at one point hit a near seven-year high against the Japanese currency, at 114.84 yen.
On the London Bullion Market, gold plunged to $1,143.47 an ounce -- which was its lowest level since April 23, 2010. It later stood at $1,145.25, which compared with $1,166.50 late in London on Tuesday.
Asian stocks mostly fell on Wednesday, although Tokyo rose 0.44 percent as the market continued to add to the 10 percent rally since the Bank of Japan's surprise monetary easing announcement last week.
However, Seoul slipped 0.19 percent, Shanghai gave up 0.47 percent and Hong Kong fell 0.63 percent. Sydney was flat.
But Wall Street opened with solid gains and the Dow hit a new record Wednesday on the Republican victory.
The Dow Jones Industrial Average climbed 0.54 percent to 17,478.27 points after five minutes of trading.
The broad-based S&P 500 rose 0.56 percent to 2,023.45, while the tech-rich Nasdaq Composite Index added 0.48 percent to 4,645.98.
- M&S shines -
On the corporate front, shares in Marks and Spencer soared 9.2 percent to 442.0 pence, topping London's FTSE 100 in the process.
The British retailer posted mixed half-year profits on Wednesday as warmer-than-expected weather dented demand for autumn clothing, while its food unit reported strong sales.
"The profit beat (forecasts) and improvement to gross margins have taken investors by surprise, with the share price strongly ahead," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
"Gross margin has shown a strong improvement, in part due to the tight control of costs which M&S is currently undertaking," he said in a note to clients.
Miners and energy groups were meanwhile battered by the tumbling commodity prices. Randgold Resources shed 2.7 percent to 3,702 pence, and Petrofac gave up 0.67 percent to 1,042 pence.
Oil prices fell in London, but tried to recover in New York as traders awaited fresh data on US energy stockpiles.
Brent North Sea crude for delivery in December dropped 42 cents to $82.40 a barrel in London early afternoon deals. It had earlier hit a four-year low at $81.63.
US benchmark West Texas Intermediate for December however reversed earlier losses to stand at $77.53 a barrel, up 34 cents from Tuesday's closing level.
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