NEW YORK (CNNfn) - Europe's major bourses ended mixed Wednesday as investors on both sides of the Atlantic awaited an interest rate decision by the Federal Reserve at the end of a two-day policy-setting meeting.
London's FTSE 100 rose 52-point, or 0.9. percent, to 5,607,90, off its 12-week low, buoyed by a rebound in banks.
"All eyes are on the Fed's decision expected later today (Wednesday). We've seen some downward pressure, especially on some of the telecom names, particularly France Telecom, and in also on some German stocks. But the main driver has been what happens with the Fed decision today," said Khuram Chaudhry, equity strategist with Merrill Lynch in London
Banking stocks were among the biggest gainers on hopes an interest rate cut in the U.S. would be followed by a similar move by the European Central Bank and Bank of England. Banking stocks typically rise when rates are cut as that encourages more borrowing and reduces the levels of bad debts.
The biggest gainer on London's benchmark index was U.K. natural gas
distributor Lattice (LAT), up 8.8 percent, after the regulator backed away from a plan that could have cut billions of pounds off its market value.
International bank HSBC (HSBC) spearheaded the sector's increase, recouping 2.1 percent of its previous day 4 percent loss. Barclays (BARC) and (RBOS) also rose.
In Paris, the blue chip CAC-40 finished down 0.65 percent to 5.057.72, with
winners and losers were nearly evenly matched.
Shares of telecom equipment maker Alcatel (PCGE) added 1.14 percent after its chairman provided streamlining details aimed at focusing on broadband and services.
France Telecom shaved 2.53 percent, its lowest level since October 1998, while Vivendi Universal (PEX), Europe's biggest media company, fell 1.53 percent after Scoot.com (SCO), in which it has a 25 percent stake, said it is running out of cash.
U.S. markets were modestly higher, with traders placing bets on technology and blue chip stocks ahead of a decision on interest rates by the Federal Reserve.
Frankfurt's electronically traded Xetra Dax closed 0.3 percent lower at 5,830.22.
German chipmaker Infineon (FIFX) bounced off record lows, falling over five percent in early trade, while electronics group Siemens (FSIE) added most downside to the blue-chip index, dropping 3 percent to  69.56 ahead of an analysts' meeting Thursday and after Deutsche Bank slashed its EPS targets for the group, traders said.
Shares in Deutsche Post (FDPW) rose 2.45 percent after its CEO reiterated that Post will beat its record 2000 sales and profits figures this year.
In the currency market, the euro was little changed against the U.S. dollar, fetching 85.97 U.S. cents compared with 86.14 cents in late New York trading Tuesday 
--from staff and wire reports
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