European markets sprinted ahead on Thursday powered by heightened investor confidence on prospects for a sustained recovery following reports of better-than-expected financial results from US companies.

The London FTSE 100 index added 0.90 percent to reach 5,154.64 while in Paris the CAC 40 rose 1.34 percent to 3,806.81. The Frankfurt DAX also gained 1.34 percent to reach 5,716.54.

Elsewhere there were gains of 0.79 percent in Madrid, 1.40 percent in Brussels, 0.73 percent on the Swiss Market Index, 1.07 percent in Milan and 1.79 percent in Amsterdam.

US shares also forged higher as the market was energized by an earnings report from aluminum maker Alcoa showing a surprise return to profits.

The Alcoa report, the first from a blue-chip firm for the third quarter, offered hope that companies are regaining health as the economy improves.

The Dow Jones Industrial Average at mid-day had risen 1.04 percent to 9,827.15 while the tech-heavy Nasdaq advanced 1.00 percent to 2,126.35.

Patrick O'Hare at Briefing.com said Alcoa's report late Wednesday "ceremoniously kicked off the third quarter reporting period. At the same time, it kicked more than a few short sellers in the mouth as the aluminum maker said mostly all the right things."

The company said its net income was 77 million dollars or eight cents a share in the quarter ended September, after three losing quarters.

O'Hare said Alcoa also offered an upbeat outlook for aluminum consumption, another sign of an improving global economy.

The market was also encouraged by news that initial claims for US jobless benefits in the week ended October 3 fell to a nine-month low of 521,000, another encouraging sign.

The report "reaffirms that labor market conditions are improving," said Michael Bratus at Moody's Economy.com.

Among stocks in focus, Alcoa rallied 3.31 percent to 14.67 dollars, extending its rally of more than 10 percent this week.

PepsiCo, which also reported earnings, fell 1.67 percent to 60.15 dollars after the beverage and snacks maker reported a better-than-expected profit of 1.72 billion dollars but said it is "still feeling the pinch of the global recession."

In London mining companies were among the day's big winners on the back of rising commodity prices. Vedanta gained 4.04 pencent to reach 2.190 pence.

The auto sector led the way in Paris, with Peugeot adding 4.68 percent to end the session at 21.585 euros while rival Renault gained 3.897 percent to close at 33.625 euros.

In Frankfurt steel makers ThyssenKrupp and Salzgitter drew strength from the Alcoa results, the former adding 4.04 percent to 23.96 euros and the latter 2.71 percent to 68.30 euros.

Earlier in the day in Asia Tokyo's benchmark Nikkei-225 index closed up 0.34 percent to 9,832.47 points on Thursday after the strong yen took some of the shine off the positive lead overnight from Wall Street.

AFP