Germany's Extra DAX stock index rose around 1.4 per cent in early trading while London's FSE 100 and the Paris bourse CAC-40 were both around 1.2 per cent stronger. The dollar firmed in Europe against both the mark and the yen though dealers said the upside seemed limited.

"Generally the election result is positive for the dollar as it puts back the idea of a Clinton impeachment," said Tony Norfield, head of global treasury research at ABN-Amro.

Markets were looking forward to the opening of business in New York, where Wall Street was expected to greet the outcome of the elections with relief, seeing the possibility of president Bill Clinton's impeachment diminishing.

The elections were seen as an unofficial referendum on whether Clinton should be impeached over the Monica Lewinskyaffair.

US Stocks were expected to gain while the reduced political uncertainty could prompt further moves out of safe-haven Treasury bonds and into perceived riskier assets.

"It's pretty much what the markets hoped for," said Tom Gallagher, political economist at Lehman Brothers. "It doesn't give the impeachment process a boost."

On Tuesday US stocks ended little changed as investors awaited the election results.

Tokyo stocks surged more than four per cent overnight to close at their highest level in two months after an influential US strategist fuelled optimism by raising his weighting in Japanese equities.

In London, where the blue chip FTSE 100 was up around 70 points in early trade, one equity salesman commented:

"Most eyes will be on Wall Street... It looks as though president Clinton has been saved from impeachment and there's bound to be relief."

The Bank of England's rate setting two-day monetary policy meeting was due to begin later in the day. Expectations were firming that it wouldannounce a further UK rate cut on Thursday, probably of 25 basis points, though some people hoped for half a percentage point.

This belief was strengthened by Monday's announcement that Britain's Office for National Statistics was suspending its monthly earnings data, which had been found to be flawed.

The data were used as a key inflation indicator. Some analysts said the embarrassing doubts over their quality meant not all interest rate rises earlier this year might have been necessary.

In Frankfurt, German stocks were propelled out of their previous day's inertia by Tokyo's robust overnight gains and a strong performance by car stocks. Autos outperformed the index as strong US sales figures for German manufacturers, released mostly after the market closed on Tuesday, lifted the shares.

BMW AG rose 4.17 per cent while Volkswagen AG and Daimler-Benz AG were both up around three per cent.

The other main focus for the market was German industrial conglomerate Siemens AG, which gained more than twoper cent ahead of its annual results. The stock had lost ground on Tuesday.

Dealers said the decision by the company to hold a news conference following the results had raised hopes that there was some positive news to come, even if the results themselves were disappointing.

"If they're going ahead and holding a conference, it's got to be something good. They're not likely to heap on even more bad news," one trader said.

UK gilt futures were a touch weaker with other bond markets, but still retaining most of the 0.5 point gain made late on Tuesday in the wake of a British pre-budget report.

German bunds were slightly lower, unable to capitalise on firmer overnight US Treasuries as German share prices rose strongly.