AFP - Europe's main stock markets jumped back into positive territory on Thursday, reversing earlier losses after news that the US economy emerged from recession in the third quarter, analysts said.

London's FTSE 100 index of top shares rallied 0.80 percent to 5,121.29 points.

In Paris, the CAC 40 leapt 1.43 percent to 3,715.95 points and Frankfurt's DAX 30 gained 1.27 percent to 5,565.73 points.

On the foreign exchange market, the European single currency rose as high as 1.4803 dollars, up from 1.4714 dollars late on Wednesday.

The US economy grew 3.5 percent in the third quarter, rebounding from a year of contraction as the country emerged from prolonged recession.

The third-quarter reading on gross domestic product (GDP), the broadest measure of the output of goods and services in the world's largest economy, topped the 3.2 percent rate expected by most analysts.

"So it is official -- after pouring 1.4 trillion dollars into the system and a cash-for-clunkers spree, US President Barack Obama can wipe the sweat of his brow and say hallelujah Yes We Can drag the US economy kicking and screaming back to life," MF Global analyst Manus Cranny told AFP.

"To be fair, a growth rate at 3.5 percent for the third quarter was better than even the most evangelical forecasts. Good news all round."

The annualized growth reported by the Commerce Department was the strongest expansion since the 2007 third quarter, when a US sub-prime mortgage crisis triggered a global financial crisis that hammered the world economy.