European shares ended slightly higher yesterday as positive results from eurozone blue chips such as EDF and Air Liquide fuelled expectations of an earnings recovery.

Gains were capped and overall trading volumes were thin, however, as some investors took to the sidelines pending the US Federal Reserve’s policy announcement today, expected to shed light on the outlook for the Fed’s quantitative easing programme.

The FTSEurofirst 300 index of top European shares closed 0.01 per cent higher at 1,206.18 points, while the eurozone’s blue-chip Euro STOXX 50 index rose 0.6 per cent to 2,759.21 points.

Around Europe, UK’s FTSE 100 index gained 0.2 per cent, Germany’s DAX index added 0.2 per cent, and France’s CAC 40 added 0.5 per cent.

“We’re optimistic because central banks are active, interest rates are low, corporate default rates are historically low and corporate results aren’t too bad given the economic situation,” said Alain Pitous, deputy CIO of Amundi.

“It’s not necessarily the indexes that are rising the most, but within indexes, you have big outperformers jumping after reporting forecast-beating results or with a positive tone on their outlook, and this should continue.”

EDF shares jumped 7.4 per cent to a near two-year high after the French power company lifted its outlook for 2013 core profit, while Air Liquide gained 3.6 per cent after upbeat comments on its outlook.

Alcatel-Lucent also surged, up 14.4 per cent after the telecom gear maker reported forecast-beating quarterly sales and said mobile chip maker Qualcomm will buy a minority stake in the group.

“The turnaround story in the eurozone is gaining traction. The recent PMIs showed improvement, the ECB is really pro-activeand there’s still a lot of room on the upside for equities from Southern Europe,” said Riccardo Designori, analyst at Brown Editore, in Milan.