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Banks push European shares higher, eyes on Fed

Published 09/23/2009, 06:54 AM
Updated 09/23/2009, 06:57 AM
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* FTSEurofirst 300 up 0.3 percent

* Banks add most points, basic resources top sector

* Eyes on Fed decision, comments on economy

* For up-to-the-minute market news, click on

By Christoph Steitz

FRANKFURT, Sept 23 (Reuters) - European stocks rose on Wednesday as banks added most points to the leading index while investors awaited the U.S. Federal Reserve's rate decision.

At 1023 GMT, the FTSEurofirst 300 index of top European shares was up 0.3 percent at 1,007.28 points.

The FTSEurofirst 300 index has soared 56 percent since reaching a floor in March, and is up 21 percent in 2009 but is still down 13 percent since just before U.S. investment bank Lehamn went bust a year ago. Banks advanced, with BNP Paribas rising 1.5 percent, UBS up 0.7 percent, and Deutsche Bank up 1.8 percent.

"There is no real newsflow, a lack of triggers, and the markets are eagerly awaiting what will happen tonight and what the Fed will say regarding the future of the economy," said Postbank equity strategist Heinz-Gerd Sonnenschein.

Shares in UniCredit, Italy's biggest bank by market value, increased 2.3 percent on talk it would carry out a capital increase which would be seen as being not particularly dilutive on earnings per share.

Basic resources shares were the other standout gainers, up 0.9 percent, with Rio Tinto up 1 percent, Xstrata up 1.3 percent, and BHP Billiton up 0.9 percent.

FED'S STANCE

Economists forecast the policy-setting Federal Open Market Committee would hold its target range for overnight interest rates steady at zero to 0.25 percent until at least 2010.

A statement outlining the Fed's policy decision was expected after European market close, at around 1815 GMT.

"We all are eager to hear what the Fed will tell us about its next steps, how the injected liquidity in the monetary system will be drained off and perhaps some hints about the economy," Close Brothers Seydler said in a note.

TeliaSonera rose 3.5 percent on renewed market talk of interest by France Telecom, traders said.

A spokesman at the Nordic region's biggest telecom operator declined to comment, while France Telecom denied the rumour.

France Telecom stock fell 1.4 percent.

Shares in carmakers fell, with the DJ Stoxx European auto index down 1.3 percent to be the biggest sectoral decliner. Daimler, BMW and Fiat were all down 1.2-2.3 percent.

Liberty International shed 7.8 percent after the real estate investment trust launched a placing of 56.1 million new shares. British peers British Land, Hammerson and Land Securities fell 0.9-3.4 percent.

Around Europe, Britain's FTSE 100 index was up 0.3 percent, Germany's DAX index up 0.2 percent, and France's CAC 40 up 0.2 percent. (Additional reporting by Blaise Robinson in Paris and Nigel Tutt in Milan; Editing by Dan Lalor)

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