(MENAFN- AFP) Europe's major stock markets firmed on Wednesday ahead of the US Federal Reserve's decision on borrowing costs in the world's biggest economy.
Investors are on tenterhooks before the US central bank's announcement, which is due at 1800 GMT and could signal the next step for US interest rates.
"European stocks are putting in a robust performance as investors pile in ahead of the US Federal Reserve's interest rate decision later today," said analyst Manoj Ladwa at brokerage TJM Partners in London.
"Given recent weak economic data, market participants are expecting the Fed to hold its hand.
"But any shock announcement is likely to send the markets into a tailspin."
At the height of the global financial crisis in 2008 the Fed slashed interest rates to near zero to stimulate growth, and introduced an unprecedented bond-buying scheme that effectively kept long-term borrowing costs down.
- US economic prospects -
The market's attention will be on how the Fed views US economic prospects for the months to come, with most bets on a rate rise being delayed at least until March.
London's benchmark FTSE 100 index of major blue-chip companies advanced 0.61 percent to stand at 6,403.91 points in afternoon trading.
In the eurozone, Frankfurt's DAX 30 gained 0.59 percent to 10,755.12 points with Volkswagen posting better than expected results, while the Paris CAC 40 rose 0.36 percent compared with Tuesday's close to 4,864.50.
The European single currency meanwhile strengthened to $1.1078 from $1.1041 late in New York on Tuesday.
US stocks opened mostly higher Wednesday, with the Dow Jones Industrial Average climbing 0.26 percent to 17,627.96 points in the first five minutes of trading.
The broad-based S&P 500 advanced 0.16 percent to 2,069.11, while the tech-rich Nasdaq Composite Index dipped 0.05 percent to 5,027.70.
The two-day Fed meeting opened Tuesday amid more signs of slower US economic activity that would further justify a delay to increasing the federal funds rate: consumer confidence sagged and durable goods orders fell for a second straight month in September.
"We have reached the penultimate decision of the year and despite the Fed's constant insistence that rates should rise this year, the market is becoming increasingly confident that it won't happen," added Oanda analyst Craig Erlam.
"Investors have been doubting the Fed's position for a while and the softening in the data in the last couple of months has only increased the belief that rates won't rise."
In contrast to Europe, Asian equities mostly fell on Wednesday as weak US economic data sent investors running for safe havens.
On Tuesday the US Conference Board said an index of consumer confidence fell in September owing to a gloomier outlook for the economy, while the Commerce Department said durable goods orders dipped for a second straight month.
The figures come after a Labor Department report at the start of the month showed jobs growth was weaker than expected in September, increasing the chances the Fed will keep rates on hold until the new year.
Policymakers are "probably more divided about when to raise rates than at any other time in the past few years", noted CMC Markets analyst Michael Hewson.
"While no change is expected today the statement will be closely scrutinised for any change of tone with respect to the timing of a rate rise this year."
- Volkswagen drives Frankfurt higher -
Away from the Fed, Frankfurt stocks motored ahead on the back of well-received third-quarter results from troubled German carmaker Volkswagen.
VW's share price revved 1.14 percent higher to 106.35 euros, having earlier gained more than four percent.
The stock was boosted by earnings that were better than expected given the massive pollution cheating scandal in which the company is embroiled.
The auto giant had earlier touched an intra-day high of 109.9 euros after it said net loss for the third quarter reached 1.67 billion euros. Analysts had forecast on average a loss of 2.12 billion.
VW also forecast that 2015 sales revenue would increase by up to 4.0 percent.
In 2014, VW sold 10.217 million vehicles worldwide and booked operating profit of 12.697 billion euros on sales revenues of 202.5 billion euros.
"Investors (are) appearing to look at Volkswagen's decent sales projections going forwards, rather than the horror-show that was the losses and charges related to its emissions scandal," noted Spreadex trader Connor Campbell.
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