European markets end higher
European markets close in the black ahead of Fed decision
LONDON (CNN) - Europe's major bourses ended higher on Tuesday, as Wall Street edged upwards ahead of a decision by the U.S. Federal Reserve on interest rates.|
London's FTSE 100 closed 0.7 percent higher at 4,818.6, while the CAC 40 blue chip index in Paris ended 1 percent higher at 4,044.66. Frankfurt's Xetra Dax was up 0.9 percent at 4,277.51.
Most economists want the Fed to cut rates by half a percentage point to 2.5 percent, the lowest interest rate since 1963.
A rate cut later on Tuesday would be the ninth this year and the second following the terror attacks on the U.S. on September 11 to bolster consumer confidence in the world's biggest economy.
"A half (percentage) point cut will offer some comfort to the European markets," James Stewart, economist at Weavering Capital, told CNN. "A quarter is not helpful."
Energy, Information technology and pharmaceutical shares were the main gainers across Europe, with media and airline stocks dragging on the markets.
BP [FSE:BP-], the world's third largest publicly traded oil company, ended 3.3 percent higher in London after saying it remained on track to deliver reported hydrocarbon production growth of at least 5.5 percent.
Shell Transport & Trading (SHEL) climbed 2.4 percent while Royal Dutch rose 3.5 percent in Amsterdam. TotalFinaElf (PFP) advanced 2.2 percent in Paris.
Bayer (FBAY), Europe's No. 2 chemicals company, earlier agreed to buy the CropScience unit from France's Aventis (PAVE), creating the world's second biggest agrochemical business.
Franco-German drug company Aventis ended 0.7 percent higher in Paris and Bayer was up nearly 1 percent, while drug company Schering (FSCH), which owns 24 percent of Aventis CropScience, rose 4.5 percent to lead the gainers in Frankfurt.
British drug company Shire Pharmaceuticals (SHP) ended 6.5 percent higher in London, the main gainer on the FTSE 100.
Europe's biggest chipmaker, STMicroelectronics (PSTM) finished up by 3.8 percent in Paris while the continent's No. 4 telecoms equipment maker, Alcatel (PCGE) advanced 2.5 percent.
The world's fifth largest communications company, France's Havas Advertising (PHAV), which counts Cadbury Schweppes, Vodafone, and AOL Time Warner among its clientele, lost 12.5 percent after saying it made a net loss of 7 million ($6.4 million) in the first six months of its fiscal year, compared to a net income of 45 million in the year earlier period.
Other media companies followed suit. In London, United Business Media declined 8.6 percent, Reed International () fell more than 7 percent and WPP Group lost 3.9 percent. Broadcaster TF1 (PTFI) dropped 4.1 percent in Paris.
The SMI in Zurich dropped 0.2 percent as investors digested an agreement by the country's top banks to rescue Swissair. UBS dropped 1.9 percent and Credit Suisse Group lost 4.5 percent.
The banks are to buy Swissair's 70.4 percent stake in low-cost airline Crossair for $160 million. Swissair will also hand over its profitable routes and assets to Crossair and seek court protection from creditors. Swissair and Crossair shares were suspended on Monday and the Swiss airline grounded its fleet Tuesday as its cash ran out.
Europe's biggest airline British Airways (BAY), which earns more than 40 percent of its revenue from North Atlantic routes and is expected to announce a sharp drop in passenger numbers on Thursday following the terror attacks, fell 4.9 percent in London.
Deutsche Lufthansa (FLHA), Europe's No. 2 carrier, fell 6.7 percent, making it the worst performer in Frankfurt.
The AEX index in Amsterdam rose 1.2 percent and Milan's MIB30 index was up 1.4 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, rose 0.6 percent.
In the U.S., markets were mixed Tuesday morning as investors looked to a widely expected Federal Reserve interest rate cut while dealing with continued negativity in the form of brokerage and corporate pessimism.
In mid-morning trading, the Nasdaq composite was up 10.04 at 1,490.50, while the Dow Jones industrial average rose 7.06 to 8,843.89.