European Markets Largely Finished Higher Ahead Of FOMC Announcement

(RTTNews) - The majority of the European markets ended Wednesday's session in positive territory. Bank stocks were among the best performers. The Federal Open Market Committee will conclude its two-day policy meeting later today. It is widely believed that the FOMC will decide to reduce its $85 billion monthly asset purchases by at least $10 billion. Investors were also focused on the minutes from the most recent BoE meeting.

Bank of England policymakers unanimously decided to maintain quantitative easing unchanged earlier this month, as economic recovery gains steam even in the absence of additional stimulus.

All the nine members of the Monetary Policy Committee led by Governor Mark Carney voted to retain the size of asset purchase programme at GBP 375 billion as they judged that more stimulus was inappropriate at present. Also, they unanimously decided to keep the record low 0.50 percent interest rate.

"No member judged that further stimulus was appropriate at present," the minutes showed, in contrast to August's view that there is "compelling" case for further stimulus.

The minutes suggested that the case for further stimulus will be stronger only if the recovery falter. The bank lifted its third quarter economic growth projection to around 0.7 percent from 0.5 percent estimated in the August Inflation Report.

Eurozone still needs a high degree of monetary accommodation to protect the recovery, European Central Bank Executive Board member Benoit Coeure said in an interview with the German daily Boersen-Zeitung.

He noted that an exit from accommodative monetary policy in the euro area at this moment in time would come way too early as the economic recovery is expected be very gradual.

Further, he defended ECB's bond buying programme called Outright Monetary Transactions (OMT). Although one can speculate about the potential risks related to OMT, Coeure said the programme has reduced risks borne by both the ECB and its shareholders.

Consumer price inflation in the United Kingdom is set to continue its slowing trend in the coming months, and will likely reach 2 percent early next year, easing the squeeze on households' real earnings, Capital Economics UK Economist Samuel Tombs said.

According to the firm, the past movements in commodity prices suggest that food inflation could drop to about 1 percent soon, while the weakness of leading measures of core price pressures suggests that core inflation will fall further.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.48 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.40 percent.

The DAX of Germany climbed by 0.45 percent and the CAC 40 of France advanced by 0.60 percent. The FTSE 100 of the U.K. fell by 0.17 percent, but the SMI of Switzerland gained 0.48 percent.

In Frankfurt, Goldman Sachs upgraded HeidelbergCement to ''Buy'' from ''Sell.'' The stock increased by 1.38 percent.

Siemens, which announced a new finance chief, climbed by 1.26 percent.

Lanxess dropped by 2.83 percent, after announcing cost cuts.

Hochtief declined by 1.89 percent, after Goldman Sachs downgraded it to "Neutral" from "Buy."

In London, Smiths Group advanced by 2.33 percent. The technology firm reported an increased annual profit and declared a special dividend.

CRH climbed by 0.41 percent, after a broker upgrade at Berenberg.

Fresnillo fell by 3.17 percent, after UBS lowered its price target on the stock.

Redrow, a developer of residential and mixed-use properties, reported a sharp increase in full-year profit, and reinstated dividend. The stock rose by 2.47 percent.

Inditex finished higher by 0.82 percent in Madrid, after reporting higher first-half results.

Nokia gained4.08 percent in Helsinki. Credit Suisse upgraded the stock to ''Outperform'' from ''Neutral.''

Eurozone construction output growth more than halved to 0.3 percent in July from 0.9 percent in June, Eurostat said in a report on Wednesday.

France's leading economic index increased in July after falling in the previous month, suggesting that the recovery in economic activity will likely continue in the near term, though at a modest pace, data from a survey by the Conference Board showed Wednesday.

The leading economic indicator moved up 0.3 percent sequentially to 115.5 in July, following a 0.1 percent decline in June and a 0.5 percent rise in May. The leading index has now increased in five out of the last seven months.

Switzerland's economic confidence increased notably in September to the highest level in five months, data from a combined survey by the Centre for European Economic Research and Credit Suisse showed Wednesday.

The ZEW-CS Indicator of economic expectations advanced to 16.3 in September from 7.2 in August. The indicator, which reflects expectations of surveyed financial market experts regarding economic development in Switzerland on a six-month time horizon, has now reached the highest level since April 2013.

Housing starts in the U.S. rose by much less than anticipated in the month of August, according to a report released by the Commerce Department on Wednesday, which also unexpectedly showed a sharp drop in building permits.

The report said housing starts rose 0.9 percent to an annual rate of 891,000 in August from the downwardly revised July estimate of 883,000. Economists had been expecting housing starts to climb to 915,000 from the 896,000 originally reported for the previous month.

Meanwhile, the report said building permits, an indicator of future housing demand, tumbled 3.8 percent to an annual rate of 918,000 in August from the upwardly revised July rate of 954,000. The drop in building permits came as a surprise to economists, who had expected permits to climb to 950,000 from the 943,000 originally reported for July.