European Markets Rally

Reuters

European stocks rose in early trade on Friday, resuming their brisk three-week rally as the European Central Bank's decision to raise interest rates helped fuel optimism over the health of euro zone economy.

Investors were also relieved that a strong aftershock which struck Japan's earthquake-ravaged northeast late on Thursday had not done major damage. News of the earthquake had sparked a bout of profit taking in late trading in Europe on Thursday.

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At 0705 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,149.74 points.

"The ECB's move is sort of removing the punch bowl, which is a good thing at this point. The message is that overall, the European economy has been improving," a Paris-based trader said.

Mining shares such as Xstrata and Anglo American featured among the top gainers, rising along with buoyant metal prices.