European stocks firm as US breaks for Thanksgiving

London - European stock markets drifted higher on Thursday in subdued trade with Wall Street closed for Thanksgiving.

"The usual Thanksgiving calm has descended across markets, as European investors reconcile themselves to a day of low volumes and quiet trading," said Chris Beauchamp, chief market analyst at online trading firm IG.

London closed 0.2% higher, while Frankfurt and Paris added 0.3%.

In foreign exchange, the dollar barrelled higher against most currencies, striking 10-month high against the yen and hitting a record high against the Indian rupee.

"The Japanese yen was amongst the day's biggest movers, continuing its descent and taking USD/JPY up above 113 to its highest since March," said market analyst Jasper Lawler at CMC Markets.

Dollar strength

"The descent was triggered by weak Japanese manufacturing data but the ultimate reason is dollar strength," he added.

The surge in the greenback helped fuel another rally in Tokyo but traders in most other Asian markets turned cautious after recent healthy gains.

US investors gave Asia another strong lead with the Dow hitting a new record on Wall Street after fresh data showed further improvement in the US economy and reinforced expectations for an interest rate hike next month.

"Wall Street closed at record highs for a third day," noted Lee Wild, head of equity strategy at stockbroker Interactive Investor.

"While few wanted to open new positions ahead of the long Thanksgiving holiday, and volume was low, it says everything about the optimism among America's money men that early losses soon turned to gains."

Global markets have largely been piling higher since Donald Trump's shock election win two weeks ago, with traders betting his big spending, high tax plans will bolster an already healthy economy.

However, there are concerns among emerging market governments that his threats to tear up global trade deals could lead to an era of protectionism and throw up huge US tariffs.

The near certainty that Trump's policies will fuel inflation, forcing the Federal Reserve to lift rates, has pushed the dollar higher.

The dollar hit a 20-month high on the euro.

The tumbling yen lifted exporters on Tokyo's Nikkei index, which ended 0.9% higher.

Minutes from the Federal Reserve policy meeting this month showed most board members thought a rate hike would be appropriate "relatively soon".

And those thoughts were backed up by figures showing a surge in durable goods orders.