Europe midday: Stocks push higher as investors await FOMC decision

European stocks edged higher amid a slew of corporate results, as investors bet that the Federal Reserve will stand pat on rates at its policy meeting later.

At midday, the benchmark Stoxx Europe 600 index was up 0.3%, while Germany’s DAX was 0.8% higher and France’s CAC 40 was up 0.5%.

“European equity markets are trading higher ahead of the Federal Reserve policy statement later today. What the Fed says about both the US domestic economy and wider global growth and any change in tone and language are fundamental to expectations of when interest rates might rise, in particular whether the first rate hike will come in December or be delayed until 2016,” said Rebecca O’Keeffe, head of investment at Interactive Investor.

Societe Generale strategist Kit Juckes said: “A policy move is really, really unlikely and I wouldn’t hold out much hope of a shift in the policy statement to encourage pricing of a December hike (by, say, removing the reference to international developments in then assessments of risks).”

On the corporate front, shares in Volkswagen advanced even though the German car maker posted an operating loss of €3.84bn in the third quarter, while Heineken rallied after its third-quarter results beat expectations.

Shares in Lloyds Bank fell sharply after it reported a decline in third-quarter underlying profit as it was hit by a further charge for insurance mis-selling.

Barclays was a little weaker as the bank confirmed the appointment of former JPMorgan investment banking head Jes Staley as its new chief executive.

Clothing retailer Next fell despite posting a 6% increase in third-quarter sales and nudging up its profit guidance for the year.

Chilean copper producer Antofagasta was firmly in the red after cutting its production target for this year again as it reported fairly stable output for the third quarter compared with the second.

On the upside, though, BT Group was a high riser after the company’s £12.5bn acquisition of the EE mobile network was provisionally approved by UK competition officials.

On the macroeconomic front, data from market research group GfK revealed that German consumer sentiment is set to weaken for the third month in a row in November as the migrant crisis takes its toll.

GfK said the forward-looking consumer sentiment index is expected to fall to 9.4 points from 9.6 in October.

Earlier, Sweden’s central bank kept its main policy rate on hold at 0.35% as widely expected, but extended its government bond purchasing programme as it looks to do more to lift inflation to its 2% target.

The Riksbank decided to extend its bond-buying by an additional SEK65bn so that purchases will amount to SEK200bn in total by the end of June 2016.