LONDON: Europe’s main stock markets opened sharply higher Wednesday on growing hopes that the Federal Reserve may later signal that US interest-rate cuts are on the way.

In initial deals, London’s FTSE 100 index gained 1.1 percent to 8,362.70 points on the eve of a possible rate reduction from the Bank of England.

In the eurozone, where the European Central Bank has already started to cut borrowing costs, the Paris CAC 40 rose 1.2 percent to 7,565.74 points and Frankfurt’s DAX won 0.7 percent to 18,543.75.

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Later on Wednesday, the Fed is highly unlikely to waver from its position of holding US interest rates at a two-decade high – but could drop hints about a September start to rate cuts.

“There is no real incentive for the Fed to surprise the market at this juncture, particularly with the US election nearing, so a moderately dovish tone from the Fed will be sufficient to signal to signal to the market that expectations are on the right track,” Rabobank analyst Jane Foley told AFP.