LONDON, Nov 27: European stock markets were higher on Thursday, advancing steadily as investors caught a ride on a technical rebound despite overwhelmingly negative economic data.

Dealers said that after the savage losses of the past several months as the financial crisis has upended any hope a deep recession can be avoided, a sharp bounce-back was always to be expected at some point.

Investors may not believe that the gains this week can be sustained given the prevailing economic headwinds. But they do not want to miss out on any upturn so, as the markets firm, the momentum can build quite quickly, they said.

The key test however comes when investors, fearful of getting caught out again, take their profits. If stocks can get through that, then the outlook might improve even if economic data suggests more bad news is to come.

The outcome hinges on how well corporate earnings hold up going through what many believe to be the worst economic and financial difficulties since the Great Depression of the 1930s.

Wall Street was closed on Thursday for the Thanksgiving public holiday but a gain of some 2.9 per cent on the Dow Jones Industrial Average on Wednesday set both Asia and Europe up for another more positive day.

In London, the FTSE 100 index of leading shares closed up 1.77 per cent at 4,226.10 points. In Paris, the CAC 40 jumped 2.54 per cent to 3,250.39 points and in Frankfurt the DAX gained 2.3 per cent to 4,665.27 points.

Elsewhere in Europe, Amsterdam advanced 3.30 per cent, Brussels rose 3.19 per cent, Madrid gained 2.26 per cent, Milan was up 1.26 per cent and Swiss stocks put on 2.59 percent.—AFP