August 05, 2006	Saturday	Rajab 9, 1427

LONDON, Aug 4: European stock markets rallied on Friday helped by some strong earnings news and a day after falling on rate-rise concerns, dealers said.

London's FTSE 100 index of leading shares rose 0.13 per cent to 5,845.70 points in late trade, Frankfurt's DAX 30 index climbed 0.56 per cent to 5,671.49 points and the Paris CAC 40 won 0.53 per cent to 5,009.91.

The DJ Euro Stoxx 50 index of leading eurozone shares increased 0.49 per cent to 3,685.82 points. The euro stood at 1.2783 dollars.

US shares had ended firmly on Thursday when falling oil prices granted investors some relief, but corporate news capped the gains as Time Warner's struggling Internet unit AOL announced a likely wave of job cuts and car giant Ford said its losses had doubled.

Japanese share prices closed with modest gains on Friday as traders remained cautious ahead of a US jobs report that could be pivotal for the interest rate outlook, dealers said.

They said views were divided on whether the US Federal Reserve would raise interest rates for the 18th time in a row on Tuesday so all eyes were turned toward the July non-farm payroll data due out late Friday.

European stock markets had closed lower on Thursday, with London's FTSE 100 index of leading shares shedding 1.58 per cent after a surprise decision by the Bank of England to raise interest rates.

The Bank of England unveiled a quarter-point rate rise to 4.75 per cent, its first rate change in a year, to control inflation and prevent economic overheating.

A rate decision by the European Central Bank, also on Thursday, was in line with expectations.

The ECB raised its key interest rates by 0.25 per centage points to 3.0 per cent.

Interest rate decisions are closely tracked by global stock markets because they affect consumer spending levels and company borrowing costs, which have a direct impact on corporate profits.

European-based companies in the spotlight Friday included Anglo American, whose share price surged 4.18 per cent to 2,316 pence after the mining giant delivered bumper first-half earnings and said it planned a new share buyback programme and dividend payout worth 5.0 billion dollars (3.91 bn euros).

In Frankfurt meanwhile, German insurance giant Allianz surged 2.28 per cent to 126.21 euros as it raised its yearly profit forecasts after posting a 64-per cent rise in second-quarter profit.

On Thursday in New York, the Dow Jones Industrial Average closed up 0.38 per cent at 11,242.59 points and the technology-weighted Nasdaq index gained 0.65 per cent to 2,092.34.

The Standard and Poor's 500 index ended 0.13 per cent higher at 1,280.27 points.—AFP