The Dow Jones index of leading American shares was up 36 points at 9081 points at 1517 GMT, falling back slightly after an opening surge.

New York stocks made moderate gains

The technology-dominated Nasdaq index was up 15 points at 2136 points.

Wall Street is expected to slow down later on as traders begin leaving early ahead of Friday's Christmas holiday.

On Tuesday, the US Federal Reserve wrapped up a tumultuous year in world financial markets by keeping America's interest rates unchanged, holding its fire until it sees evidence of a widely expected slowdown in domestic growth next year.

London firm

Meanwhile in London leading shares held firm in midday trading after a flat start.

Fresh hopes of further interest rate cuts emerged as minutes of the last Monetary Policy Committee meeting showed a unanimous decision to cut rates.

The FTSE 100 index of leading shares was up 28.2 points at 5871.5 at 1230 GMT.

Europe up and down

In Europe, the markets are also preoccupied with Christmas and getting ready for the launch of Europe's new single currency on January 1, 1999.

Frankfurt shares started down but edged higher buoyed by Wall Street's rise the day before.

At 1224 the Xetra Dax index was up 32.53 points at 4912.00.

Given the extremely thin volume and dearth of news, dealers said they find it difficult to predict in which direction share prices will move in the rest of the session.

"With these volumes, anything is possible," said Gerald Kany who is with customer trading at Dresdner Bank in Frankfurt.

It was a similar picture in Paris where the Cac 40 index was 22.54 points higher at 3842.62 at 1224.

Gloomy Asia

Most Asian stock markets headed downwards on Wednesday but trade was thin.

Hong Kong shares fell 1.73% and Sydney shares dipped 0.17%.

Tokyo's market, meanwhile, was closed for the Emperor's birthday, a national holiday.

Tokyo's key Nikkei stock index had dropped 373.50 points, to close at 13,779.45 on Tuesday - its lowest close since October 30.

Share prices fell on fears that declines in the bond market would further hurt Japan's ailing banks.

On Wednesday, Hong Kong's Hang Seng index had also tumbled to 10,143.95 by midday.

It was pulled down by selling of shares in China Telecom after regulators insisted on steep cuts in fees from suscribers in certain regions.