Axa and fellow insurers helped push European equity markets to a higher close yesterday, as a thin corporate and economic agenda left investors awaiting the US Federal Reserve's latest economic prognosis.
The Fed will give its latest assessment of the world's largest economy at 1815 GMT and investors will scour the statement for any sign that the central bank may raise interest rates, currently at a 45-year low, sooner than they had anticipated.
"What the Fed will say tonight is important, although it may have more of an impact on the bonds market," said SG Assets Management strategist Michaela Marcussen.
By 1545 GMT, with only Frankfurt still officially trading, the FTSE Eurotop 300 index of pan-European blue chips was up 0.6 per cent at 878 points, with advancing issues eclipsing decliners by nearly three-to-one.
The scorching three-month comeback rally to June has made way for more modest gains - with the benchmark Eurotop range-bound between 833 and 884 points since June 19 - though the sharp correction anticipated by many during July has failed to materialise.
The narrower DJ Euro Stoxx 50 index rose 0.7 per cent to 2,496 points.
More and more strategists were convinced that further equity gains were possible on the back of a continuing improvement, even at a moderate pace, in economic fundamentals.
"We believe we are at the beginning of a new bull market but this is more likely to look like the stop-and-go bull market of the early 1990s than the massive rally of the late 1990s," SG's Marcussen said.
But another equity buying spree was not expected before September, when more investors and market players have returned from their holidays.
"We may be in a classic summer lull but shares will break out on the upside in due course," says Rupert Thompson, a global strategist at E*Trade.
Thompson said investors did not so much hope to be surprised with better-than-expected macro news, but rather to see gathering evidence which confirms forecasts of a second-half pickup in US economic growth to 3.5 to 4.0 per cent.
The bulk of US data later in the week, including retail sales, consumer prices, industrial production and consumer sentiment data, may offer signs that recent improvements in confidence are being translated into concrete economic growth.
Around Europe, London's FTSE 100 closed 0.2 per cent higher while the CAC 40 ended up 0.6 per cent in Paris and the Swiss blue chip index gained 0.9 per cent. Frankfurt's DAX was some one per cent higher by 1545 GMT.
On Wall Street, the Dow Jones industrial average was flat at 9,214 points, while the Nasdaq Composite Index had risen 0.2 per cent to 1,665 points.
Axa, France's number one insurer, gained 3.8 per cent despite its first-half profit slumping by 75 per cent due to securities writedowns and the weak US dollar, as investors cheered forecast-topping core results and news that the group expected to beat a key underwriting profitability target by year-end.
Other insurers including Allianz and ING Groep, which post results on Thursday, also rallied, gaining 3.4 and one per cent respectively.
In the technology sector, Germany's Infineon firmed 3.9 per cent after a decision from the European Union to impose anti-dumping duties on South Korean chip rival Hynix. French peer STMicroelectronics ended 2.2 per cent higher.
But UK telecom operator BT Group was a black spot, slipping two per cent on the threat of a tougher regulatory regime and stiffer competition from cable operators.
British satellite TV company BSkyB also lost two per cent after it declined to say when it would resume dividend payments, which overshadowed the release of strong full-year results.