LONDON, Nov 30: European shares rallied on Friday after US Federal Reserve chief Ben Bernanke cheered global markets by hinting at another US interest rate cut next month, dealers said.

They added that worries over the US subprime loan crisis continued to ease, tempting bargain-hunters to buy shares.

Friday’s gains were made on the anticipation the Fed will cut rates, so it could derail if the central bank doesn’t do what is expected of it, said Andrea Williams, European fund manager at Royal London Asset Management.

In late morning deals, London’s FTSE 100 index of leading companies rose 0.58 per cent to 6,385.90 points. In Frankfurt the DAX 30 added 0.79 per cent to 7,826.69 points and in Paris the CAC 40 gained 0.75 per cent to 5,639.83 points.

The DJ Euro Stoxx 50 index of top eurozone shares rallied 0.62 per cent to 4,373.80 points.

The European single currency stood at 1.4752 dollars.

Fed chief Bernanke gave a speech overnight that was widely interpreted as a signal for another likely rate cut at the US central bank’s next policy meeting on December 11.

Bernanke said that the Fed saw a high degree of uncertainty in the US economic outlook and was worried that strains in financial markets may lead to broader problems.

He said policymakers are carefully monitoring “mixed” economic data, with a depressed housing sector, strong labor market and consumer spending “on the soft side. In London on Friday, the market was buoyed by merger and acquisition (M and A) talk in the mining sector.

Miners are being helpful -- and have been for the last few months -- with M and A potentially spreading outwards, said equities analyst Keith Bowman from Hargreaves Lansdown.

There’s Rio and BHP, but there’s also a rumour of potential tie-ups for Anglo American.

Anglo American shares surged 4.38 per cent to 3,292.00 pence, Antofagasta jumped 3.11 per cent to 778.5 pence and Vedanta Resources added 2.83 per cent to 2,254 pence.

In Paris, steelmaker Arcelor Mittal saw its share price increase 1.79 per cent to 50.74 euros, while Thyssenkrupp leapt 3.18 per cent to 39.90 euros.

US shares closed modestly higher Thursday, after a strong two-day rally, as online broker ETrade announced it had won a timely 2.5-billion-dollar injection from the Citadel hedge fund.

Investor optimism has surged for a US interest rate cut next month to bolster the US economy and avert a recession, dealers said.

American borrowing costs stand currently at 4.50 per cent.-—AFP