European shares rally after Turkey acts to defend lira
* FTSEurofirst 300 up 0.9 pct
* Growth-sensitive sectors lead miners higher ahead of Fed
* Anglo American, Antofagasta post record copper output
* Spain outperforms, in positive territory for the year
LONDON, Jan 29 (Reuters) - European shares rose on Wednesday after Turkey ramped up its interest rates overnight to defend its currency, helping buoy stocks that had been hit by a selloff in emerging markets.
Sectors sensitive to global growth trends, such as miners , led the market higher after Turkey's central bank jacked up its overnight lending rate to 12 percent from 7.75 percent in a much sharper move than forecast. Investors said the move could help stem a recent sell-off in emerging markets.
The pan-European FTSEurofirst was up 0.9 percent at 1,309.41 at 0836 GMT, having fallen 4.2 percent in three sessions into the beginning of this week.
"They acted quite aggressively, and you might see others follow suit. We could push on to further gains in Europe," Mike Harris, partner at TJM Partners, said. But he said the market would also be watching the U.S. Federal Reserve, which meets on Wednesday to discuss further slowing of its stimulus programme.
Turmoil in emerging markets is unlikely to deter the Federal Reserve from trimming its bond-buying stimulus by a further $10 billion on Wednesday.
An emerging market sell-off last summer was triggered when the Fed indicated that it would start slowing asset purchases by the end of the year, although the first round of "tapering" in December was met with a muted response.
"Given that the last reaction to the Fed meeting and the decision to taper was relatively positive, I think the Fed feel they can comfortably taper 10 billion and keep things relatively under control. But we have had a warning that the markets can turn here in the last few days," Harris said.
Leading the miners higher were Anglo American and Antofagasta, up around 5 percent, after both posted record copper production, on a quarterly and a yearly basis respectively.
Peripheral markets rallied strongly, with the Spanish up 1.5 percent, benefiting from a recovery in sentiment towards the Latin American markets it has heavy exposure to, and also a continued drop in sovereign yields that have been largely unscathed in the past week.
The index is now back in positive territory for the year, unlike Germany's DAX and Britain's FTSE, having outperformed in early January signs of life in its domestic economy.
"Europe's stabilised, and Spain has done the right things. It's actually now a shame that they have that emerging market exposure, because underlying Spain isn't horrific any more," Nick Xanders, who heads up European equity strategy at BTIG, said, adding there could be further jitters over emerging markets to come.
"In this sort of rally, you've got to sell down emerging market exposure, and you want to have exposure to the European recovery."
Today's European research round-up
Asset returns in 2013: