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European Shares Set to Jump as Fed Slashes Rates

European stocks are expected to open sharply higher on Wednesday, adding to the previous session's gains, after the Federal Reserve cut U.S. interest rates by a bigger-than-expected 50 basis points and stoked a rally in global equities.

U.S. stocks made their biggest gains in almost five years as the Fed's cut, the first in four years, raised hopes the economy could ride out a prolonged housing slump and turmoil in the credit market.

Financial bookmakers expect Britain's FTSE 100 Index to open as much as 1.3% higher, Germany's DAX is seen rising as much as 1.6% and France's CAC is set to jump as much as 2.0%.

Asian stocks surged, with MSCI's measure of Asia Pacific stocks excluding Japan up 3.7% at 499.9, its strongest level in nearly 8 weeks.

The Dow Jones Industrial Average jumped 2.5% to end at 13,739.4, the Standard & Poor's 500 Index surged 2.9% to 1,519.8 and the Nasdaq Composite Index rallied 2.7% to 2,651.7.

Markets will also eye oil prices as U.S. crude hit a record high of $82.38.