European shares rise after Turkish rate hike

LONDON Wed Jan 29, 2014 3:13am EST

LONDON Jan 29 (Reuters) - European shares rose on Wednesday after Turkey hiked all its key interest rates overnight to defend its currency, helping to buoy equity markets that had been hit by waning appetite for riskier assets.

Turkey's central bank raised its overnight lending rate to 12 percent from 7.75 percent in a much sharper move than forecast, and investors said it could help stem a recent sell-off in emerging markets.

"It's a step in the right direction," said Berkeley Futures associate director Richard Griffiths.

The pan-European FTSEurofirst 300 index was up 0.8 percent at 1,308.29 points in early trading, and the euro zone's blue-chip Euro STOXX 50 index rose 1 percent to 3,068.96 points.

The FTSEurofirst 300 had lost 4.2 percent between Thursday and Monday, marking its steepest three-day fall since June 2013, as investors fretted about slower Chinese growth, reduced U.S. monetary stimulus and domestic problems in emerging markets from Turkey to Thailand and Argentina.