LONDON (AFP) - European stock markets rose strongly in early deals after US and Asian shares saw sharp gains in the wake of plunging oil prices.
The London FTSE 100 index gained 0.60 percent to 4,657.70 points, the Frankfurt DAX won 0.59 percent to 3,952.25 points and the Paris CAC 40 rose 0.75 percent to 3,706.09.
The DJ Euro Stoxx 50 index of leading eurozone shares advanced by 1.08 percent to 2,817.22 points.
The euro stood at 1.2680 dollars.
US stocks surged for a second successive session Wednesday as investors buoyed by a sharp drop in crude oil prices sent the Dow Jones Industrial Average above the 10,000 mark for the first time in two weeks.
The blue-chip index rallied 1.15 percent to 10,002.03 points and the tech-heavy Nasdaq composite leapt 2.14 percent to 1,969.99.
The broad-market Standard and Poor's 500 index advanced 1.29 percent to 1,125.40 points.
The catalyst was a better-than-expected report on US oil inventories, which eased concerns about tight supplies going into the winter heating season. That prompted a sharp drop in crude futures, which in turn helped the stock market.
Dealers are worried that high oil prices could dampen companies' earnings.
New York's benchmark contract, light sweet crude for delivery in December, plunged 2.71 dollars, or 4.9 percent, to close at 52.46 dollars a barrel on Wednesday, a three-week low.
The benefit of plunging crude prices rippled across Asia, with Tokyo's benchmark Nikkei-225 index closing 1.51 percent higher at 10,853.12 points on Thursday. Hong Kong's key Hang Seng Index added 2.18 percent to finish on 13,113.15 points.
In London, Royal Dutch/Shell shrugged off weaker oil prices, surging 5.84 percent to 448.5 pence after the group announced a 70-percent rise in third quarter earnings and plans to merge its separate holding companies.
Shell said it would overhaul its corporate governance structures in a move aimed at restoring investor confidence after downgrading its proven oil and gas reserves by one-fifth since January.
European airlines meanwhile profited from the tumbling oil prices, with British Airways climbing 2.54 percent to 211.75 pence and Germany's Lufthansa soaring 4.01 percent to 10.12 euros.
Elsewhere, German car giant Volkswagen managed a rise of 2.47 percent to 35.20 euros, despite complaining that cut-throat competition, high oil prices and the weak dollar had nearly halved its earnings so far this year.
In Paris, Alcatel, the French telecom equipment maker, climbed 2.59 percent to 11.49 euros as investors welcomed the company's higher-than-expected third-quarter operating profit alongside its reiteration of full-year earnings guidance, dealers said.
10/28/2004 - 11:35 GMT - AFP