European stock markets firm ahead of US Fed decision

European equities mainly rose yesterday ahead of a US interest rate call, as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson.

The capital’s benchmark FTSE 100 index bucked the trend, marginally, ending the day down a mere 0.02 per cent at 6.068,16 points.

In Paris, the CAC 40 rose 0.55 per cent to 4,067.72 points, its fifth consecutive rise, while in Frankfurt the DAX added 0.66 per cent to 7,404,95 points.

Later yesterday, investors switched their focus to the outcome of the US Federal Reserve’s two-day policy meeting.

The central bank’s Federal Open Market Committee was widely expected to maintain interest rates at between zero and 0.25 per cent, where they have stood since December 2008.

Fed Chairman Ben Bernanke was meanwhile to hold his first post-FOMC press conference – the first for any Fed chairman.

“The main focus today (yesterday) is the FOMC policy announcement and Bernanke press briefing,” said VTB Capital economist Neil Mac-Kinnon.

In London, BP shares gained 0.39 per cent to 466 pence, after the energy group posted a 17-per cent jump in first-quarter net profits.

Earnings after taxation leapt to $7.124 billion (4.9 billion) on the back of surging oil prices, one year after being hit by the US oil disaster.

However, BP also upgraded the cost of last year’s devastating Gulf of Mexico spill to $41.3 billion. That compared with previous guidance of $40.9 billion.

Elsewhere on European bourses the movement was also upwards with Milan the best performer gaining 1.39 per cent.

The Madrid stock market was up 0.85 per cent and Lisbon by 0.44 percent while Brussels and Amsterdam made marginal gains, up 0.09 percent and 0.04 per cent respectively.

Swiss stocks were unchanged.

In Stockholm, Swedish telecom equipment maker Ericsson revealed that net profits rocketed 224 per cent to 4.1 billion kronor (460 million, $ 675 million) in the first-quarter.

The figure was higher than the three billion kronor which analysts consulted by Dow Jones Newswires had expected.

In reaction, Ericsson shares soared 9.61 per cent to stand at 86.8 Swedish kronor.On the downside, British bank Barclays saw its share price drop 4.75 per cent after revealing that net profits fell in the first quarter, hit by falling revenues at its investment banking division.

London investors meanwhile digested news that the economy rebounded in the first three months of the year, in line with market expectations.

British gross domestic product (GDP) increased by 0.5 per cent in the first quarter of 2011, after a slumping by 0.5 per cent in the fourth quarter of 2010, official data showed.

“The main event for the UK was that GDP release, which came in at 0.5 per cent as expected. As usual, stocks barely flinched on the news,” noted IG Index analyst David Jones.

US stocks were little-changed in early trading, as investors await the Federal Reserve decision, helped by some solid company earnings reports and positive data on orders for industrial goods.

At 1645 GMT the Dow Jones Industrial Average was up 0.13 per cent to 12,611.87

The tech-rich Nasdaq Composite was off 0.03 per cent at 2,846.55 and the S&P 500 lost 0.06 per cent at 1,346.42.