LONDON, Jan. 4 (Xinhuanet) -- Major European stock markets powered on to a new 4-1/2 year high on Wednesday, led by industrials and retailer Next, with the broad market cheered by signals the U.S. interest rate tightening cycle might be near its end.

    In London, the FTSE 100 index raced past the 5,700 to close the session at a new four-and-a-half year high.

    Fashion retailer Next led the gainers, jumping 14.25 percent to 1730 pence after a better than expected Christmas period helped it to raise profit expectations.

    Speculation that insurer Prudential may be a takeover target saw its shares race two percent higher.

    The FTSE 100 index closed the day 33.1 points higher at 5,714.6 and analysts predicted it will hit 6,000 this year.

    In Paris, French shares made further gains on Wednesday, with the CAC 40 index up 60.3 points at 4,837.3.

    Dealers said European markets were tracking Tuesday's surge on Wall Street after the Federal Reserve hinted at an end to interest rate rises.

    Energy companies EDF and GDF were among the gainers as Russia and Ukraine ended their dispute over gas. Losers included Renault, Total and EADS.

    In Frankfurt, German shares rose sharply on Wednesday, in line with gains made by other leading European stock markets, with the DAX index ending 58.38 points higher at 5,519.06.

    Bucking the trend, BASF's shares fell 1.6 percent on news of its hostile bid offer for US rival Engelhard. Other fallers included Volkswagen and Henkel.

    In the currency market, the U.S. dollar went down against the euro, ending the session at 1.2133 dollars to a euro from 1.1983, and the dollar also ebbed against the Japanese yen, closing at one dollar to 115.95 yen from 116.38.

    The greenback dropped against the British sterling, ending at 1.7610 dollars to a pound from 1.7421. Enditem