Europe close: Stocks rise ahead of Fed meeting

European stocks finished higher ahead of the US central bank´s policy announcement which was due out later in the day amid a slew of corporate results.

The benchmark DJ Stoxx Europe 600 index was up 1.06% or 3.94 points to 375.82, while Germany’s DAX advanced 1.31% or 139.77 points to 10,831.96. France’s CAC 40 ended the day with gains of 0.90% at 4,890.58.

For Bill Hubard, chief economist at Bullion Capital, if the US Federal Reserve is 'boxed-in' by worries about the global economy and the upcoming elections Stateside, as some argue, then it is difficult to understand how it will ever manage to hit its own projections for a Fed funds rate at 3.5% by the end of 2018.

Societe Generale strategist Kit Juckes chipped in saying: “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 the assessment of risks).”

On the corporate front, shares in Volkswagen edged higher by 2% even though the German car maker posted an operating loss of €3.84bn in the third quarter, while stock in Heineken jumped 4% 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 slipped despite posting a 6% increase in third-quarter sales and nudging up its profit guidance for the year.

Chilean copper producer Antofagasta dropped 1.47% 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, BT was a high riser after the company’s £12.5bn acquisition of the EE mobile network was provisionally approved by UK competition officials. Stock in the group rose 3.7%.

In economics news, data from market research group GfK revealed that German consumer sentiment was 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 was expected to fall to 9.4 points from 9.6 in October.

Earlier in the day, 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.