European shares mainly rise on Fed stimulus hope

European stocks mostly rose Wednesday on hopes that the Federal Reserve would announce more stimulus measures, while investors shrugged off news that North Korea has launched a long-range rocket. Markets also digested news that a Greek debt buy-back scheme designed to release much needed EU-IMF bailout funds appears to have progressed smoothly. In midday deals, London\'s FTSE 100 advanced 0.25 percent to 5,939.61 points, Frankfurt\'s DAX 30 gained 0.26 percent to 7,609.11 points and the Paris CAC 40 eased 0.08 percent to 3,643.21. Milan\'s FTSE Mib benchmark increased by 0.47 percent and Madrid\'s IBEX 35 advanced 0.45 percent. In foreign exchange activity, the European single currency climbed to $1.3022, down from $1.3003 late in New York on Tuesday. Gold prices firmed to $1,713.75 an ounce on the London Bullion Market, from $1,710. \"Fed expectations are the likely basis for today\'s new upward move as ... markets shrug off some geopolitical difficulty on the Korean peninsula,\" said analyst Chris Beauchamp at trading group IG. \"The Fed is expected to provide an early gift for investors, extending purchases of mortgage-backed debt and overhauling Operation Twist so that it involves additional expansion of the Fed\'s balance sheet. \"Such a move would be a welcome distraction for markets bored by the political brinksmanship being played out in Washington.\" The Fed\'s policy committee is set to decide on what action to take as the end approaches of its \"Operation Twist\" -- selling short-term debt to buy longer-term debt. There are expectations that policymakers will replace it with more outright bond purchases, or \"quantitative easing\", aimed at lowering interest rates to encourage businesses to invest and hire. The outcome of the US central bank\'s latest two-day meeting will be announced at 1730 GMT. Asian equities also rose as dealers welcomed signs of progress in talks on the US fiscal cliff and upbeat data from Germany and Spain, and despite North Korea\'s rocket launch. With investors becoming more confident the safe-haven yen came back under pressure ahead of a general election in Japan on Sunday and expectations of more monetary easing by the country\'s central bank. In Paris, shares in carmaker PSA Peugeot Citroen, struggling with financial problems and a restructuring, rose by 5.30 percent to 5.19 euros on a newspaper report that Algeria might be interested in acquiring a shareholding. Tokyo shares rose 0.59 percent, Hong Kong added 0.80 percent, Shanghai was 0.39 percent and Sydney climbed 0.17 percent to a 17-month high. US President Barack Obama and Republican House Speaker John Boehner have swapped new offers to avoid the fiscal cliff of huge tax hikes and spending cuts due to come into effect on January 1, according to sources on both sides. It fuelled hopes that the two, who have been at loggerheads over plans to increase taxes on the rich and slashing aid to Medicare, could come to an agreement. If a deal is not reached by the New Year, the package currently in place is widely expected to send the economy into recession. Sentiment was also buoyed this week by positive numbers from Germany, where investor sentiment in Europe\'s key economic machine hit a seven-month high on hopes it will dodge recession.