European shares rise as investors await Fed

Europe\'s main stock markets mostly rose on Wednesday in cautious deals before the outcome of the US Federal Reserve\'s latest monetary policy meeting, dealers said. In late morning deals, London\'s FTSE 100 index of top blue-chip companies added 0.55 percent to 6,607 points and Frankfurt\'s DAX 30 edged 0.02 percent higher to 8,272.80 points, while the Paris CAC 40 eased 0.03 percent to 3,985.5 points. Despite the gains in London, Barclays shares sank 1.13 percent to 288 pence as investors continued to react to news of a vast £12.8-billion hole in the British bank\'s balance sheet. The stock had already plunged by 5.74 percent on Tuesday. In foreign exchange activity, the euro firmed to $1.3282 from $1.3261 in New York late on Tuesday. On the London Bullion Market, the price of gold advanced to $1,331.78 an ounce from $1,324.15 on Tuesday. \"The two day meeting of the policy arm of the Federal Reserve comes to a conclusion today which may lead to more subdued market conditions as traders leave any decision making on both short and medium term direction until after the announcements,\" said CMC Markets analyst Nick Dale-Lace. Asian markets mostly fell on Wednesday in the final hours before investors discover the Fed\'s plans for its massive stimulus programme. Traders have remained cautious ahead of the central bank meeting, although most economists are confident it will indicate that its $85-billion-a-month bond-buying policy will remain in place for the time being. All eyes will be on the accompanying statement from the Fed\'s rate-setting Federal Open Market Committee (FOMC). Ahead of the Fed announcement at 1800 GMT, markets digested a raft of economic data in Europe. Unemployment held at record highs in the 17-nation eurozone in June but there was some hope of an improvement as the numbers of those out of work fell slightly, official data showed Wednesday. The overall eurozone jobless rate came in at 12.1 percent, unchanged from May, the Eurostat data agency said. On a more upbeat note, the number of unemployed people fell by 24,000 to 19.26 million, according to Eurostat. \"Encouraging unemployment data for the eurozone has got things off to a positive start on Wednesday,\" said analyst Craig Erlam at trading firm Alpari. \"However, investors are clearly focused on one thing today, the FOMC statement, with European indices and US futures only trading marginally higher in response to the figures.\" Meanwhile, official data showed that the unemployment rate in European powerhouse Germany held steady at 6.8 percent in July, but the number of jobless fell by 7,000. \"A busy day dawns for markets, with a bombardment of data that leaves little time for traders to rest,\" added IG analyst Chris Beauchamp. \"It started early this morning with weak German retail sales, but the picture got better as both German and Italian employment data showing welcome improvement.\" In Paris, shares in PSA Peugeot Citroen surged by slightly more than 7.0 percent on results showing an almost halving of losses in the first six months. Aerospace group EADS reported strong overall figures for the first half and a name change to Airbus. In Germany, the giant industrial conglomerate Siemens named a new chief executive to restore credibility with shareholders. British electrical engineering firm became the target of an agreed bid worth £3.4 billion (3.9 billion euros, $5.2 billion) from French group Schneider In Asia, Tokyo closed down 1.45 percent on profit-taking after the previous day\'s gains. Seoul lost 0.16 percent and Hong Kong fell 0.32 percent, while Shanghai rose 0.19 percent in value. In recent months, concerns about the future of the Fed\'s so-called quantitative easing programme have led to sharp swings in global markets. But Fed chief Ben Bernanke has reiterated the central bank\'s intention only to wind down the scheme when the US economy can stand on its own two feet. Later this week, on Thursday, investors will digest interest rate decisions from both the Bank of England and the European Central Bank.