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Shares Set to Surge After Dow Bounces Back

European stocks were poised to bounce back from recent sharp declines on Thursday, tracking a recovery on Wall Street overnight on hopes that troubled bond insurers will be rescued, preventing more credit-related losses.

Financial bookmakers, or spread betters, in London expected Britain's FTSE 100 index to open between 153 and 169 points higher, or as much as 3 percent, the German DAX 269 to 276 points higher, or as much as 4.3 percent and the French CAC 40 144 to 198 points higher, or as much as 4.3 percent.

The Dow Jones Industrial Average gained nearly 300 points, or 2.5 percent, on Wednesday as news of a meeting between New York regulators, bond insurers and their customers lifted the market out of negative territory in late afternoon on Wall Street.

European stocks ended at their lowest close in 1-1/2 years on Wednesday, as investors' relief after a surprise hefty U.S. interest rate cut quickly vanished and fears of more mortgage-related writedowns hit banks again.

The FTSEurofirst 300 index of top European shares is down 16 percent since the start of the year, as worries over a U.S. recession and fears that banks could unveil more writedowns have hit equity markets worldwide.