European stocks rose to the highest level in more than two months Wednesday as global markets got a boost from some early steps towards tax reform in the United States and a mega-merger on the Continent revived economic optimism.

The Stoxx Europe 600 benchmark, the broadest measure of regional share prices, was marked 0.23% higher at 384.92 in the opening 90 minutes of trading after topping the 385 mark for the first time since July 21. Early indications from Wall Street suggest the three major indices will also bump higher at the start of trading, with Dow Jones and S&P 500 mini futures indicating 17-point and 4-points gains respectively.

The market's biggest boost came from what is likely to be the region's biggest-ever transportation merger, with shares in Germany's Siemens AG (SIEGY) and France's Alstom SA (ALSMY) surging at the opening bell after agreeing to combine their rail divisions in a €7.4 billion deal designed to see-off competition from China.

The late Tuesday tie-up, which will give German industrial giant Siemens just a shade over 50% control of the combined group, still needs regulatory and shareholder approval, but nonetheless represents a major breakthrough in Franco-German industrial relations just as the two countries are attempting to form a cohesive position on European political leadership.

Siemens shares were marked 1.74% in Frankfurt and changing hands at €118.43 each by 10:30 local time. Alstom shares, meanwhile, surged 5% to €35.25 each. France's CAC-40 added 0.25% in the opening 90 minutes while the DAX performance index in Germany was marked 0.57% higher.

Britain's FTSE 100 gained 37 points, or 0.5% with stocks getting an extra lurch upward from a weaker pound, which was marked 0.65% lower against a stronger U.S. dollar at 1.3371.

The dollar index, which measures the greenback's strength against a basket of six global currencies, added 0.47% overnight to trade at a one-month high of 93.40 after Federal Reserve Chairwoman Janet Yellen reiterated the central bank's aim for gradual rate hikes and Congressional Republican lawmakers set out plans to detail a tax reform bill that be revealed as early as today.

Corporate tax rates could be cut from 35% to 20% if the plan is adopted, media reports indicate, while individuals would have their top rate of tax capped at 35%. Companies would also be able to write off capital spending plans for the next five years, Bloomberg reported.

The dollar's rise has the European single currency extending its longest decline of the year as it slips for a third consecutive session to 1.7736 amid concern that coalition talks following Germany's Federal vote could take months and could even lead to a new elections early next year.

Overnight in Asia, the region's broadest measure of share prices, the MSCI Asia ex-Japan index, was essentially unchanged on the session, although early reaction to the U.S. tax reform plans had lifted the benchmark around 0.2% in earlier trading.

Japan's Nikkei 225, however, closed 0.3%, or 63 points lower at 20,267.05 points although more than 130 points were taken from the benchmark today owing to several high-yielding shares trading ex-dividend.

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