London's FTSE 100 was down 9 points, or 0.2 per cent, at 6,293.4, weighed down by losses in its two major oil companies and a near 3-per cent drop for Vodafone. The CAC 40 in Paris rose more than 1 per cent to 6,018.62, after gains of 3 per cent in each of the past two sessions, while the Xetra Dax in Frankfurt fell 8 points to 7,163.86.
Zurich's SMI advanced 42 points, or 0.6 per cent, to 7,140.1, while Amsterdam's AEX spurted 1.6 per cent, supported by gains by business software maker Baan and airline KLM .
The pan-European FTSE Eurotop 300 added 0.3 per cent to reach 1,542.26, with transport, media and information technology sub-indexes all showing gains of between 2 per cent to 5 percent. Oil and gas stocks led the decliners, shedding 3 per cent.
In Asia, Tokyo's benchmark Nikkei Average of 225 leading shares ended up 207.51 points, or 1.1 per cent, at 19,786.42 as excitement kept swirling around the launch of several new investment funds.
In Hong Kong, the Hang Seng was up 1.25 per cent, or nearly 200 points, at 15,987.94 late Thursday, building on early gains as interest swirled around small-cap technology stocks.
Wednesday, stock market traders initially liked what they heard after the U.S. Federal Reserve announced that it was increasing both short-term interest rates and the mostly symbolic discount rate by a quarter point.
The increase fell within expectations and the stock markets rallied soon after before being stung by sell programs at the end of the day. The TSE 300, which is immune to the machinations of program trading, merrily went on its way to record territory.
The Fed also announced that it will remain vigilant in its fight against inflation: "The committee remains concerned that over time increases in demand will continue to exceed the growth in potential supply, even after taking account of the pronounced rise in productivity growth."
Sounds like tough talk, but it is also music to investors' ears. Having a Fed that is inflation-phobic means there will be little chance of surprise rate hikes between committee meetings.
The divergence between the Fed's actions and the bond market continues. Interest-rate sensitive bonds have been on a tear, reflecting the opinion that inflation is dead and that the Fed will resist raising rates in the near future. News that the supply of long-term treasury bonds will be curtailed gave bonds another boost.
The stock market, however, will remain a trader's market for now. Stocks are generally influenced by potential earnings numbers and interest rates. With the Fed out of the way and reporting season coming to an end, a vacuum will develop where rather insignificant market and economic news will allow traders and program-trading to take charge, for now.
