Summary The Fed's bond-buying scheme floods financial markets with dollars to keep interest rates down.
LONDON (AFP) - European stock markets rose on Tuesday as traders reacted to a host of company earnings updates and looked ahead to the start of the US Federal Reserve s latest policy meeting.
London s benchmark FTSE 100 index climbed 0.53 percent to stand at 6,761.51 points in London midday deals, as traders digested results from major players in the banking and energy sector.
Frankfurt s DAX 30 gained 0.23 percent to 8,999.33 points and in Paris the CAC 40 slipped 0.50 percent to 4,273.06 compared with Monday s closing values.
The Madrid market gained 0.97 percent and Milan rallied 1.65 percent.
Indices rose "as a dividend hike from BP and rallying bond markets in Spain overshadow a fresh flurry of fines that continues to handicap European banks", said CMC Markets senior trader Toby Morris.
"Whilst Banks will claim that they are now rid of the kind of behaviour that led to the astronomical fines of the last few years, investors will wonder just when they will be able to judge an institution on current merits, rather than fearing that every quarterly update is likely to be overshadowed by another set of impairments for historical foul play."
Deutsche Bank said that its net profit in the third quarter was hit by "substantial litigation charges" and weaker investment banking, sending its share price falling 1.10 percent to 35.5 euros.
It is being investigated over allegations that some of its employees may have been involved in rigging the Libor and Euribor interest rates.
And a number of top managers are also suspected of involvement in a tax evasion scheme in the trading of carbon emissions certificates.
The group said it had set aside 1.2 billion euros ($1.65 billion) in provisions for litigation charges in the third quarter, bringing the overall total in provisions so far to 4.1 billion euros.
On the upside, BP surged 4.29 percent to 471.5 pence.
"Profit has exceeded forecasts, whilst news of an increase in the (BP) dividend payment is greatly welcomed" by investors, said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.
In foreign exchange, the euro fell to $1.3757 from $1.3785 late in New York on Monday.
The dollar rose to 97.93 yen from 97.65 on Monday.
The euro climbed to 85.59 pence against the British pound, which was down to $1.6073.
On the London Bullion Market, the price of gold dropped to $1,346.91 an ounce from $1,361 on Friday.
Fed set to sit tight on stimulus
While analysts widely expect the Federal Open Market Committee (FOMC) to keep its $85 billion-a-month stimulus in place, they will be poring over Wednesday s announcement for an idea as to when it will start winding down.
The bank had been expected to begin tapering by the end of this year but a weak set of US data -- including soft jobs growth -- and this month s two-week government shutdown has made that highly unlikely.
Most traders expect a reduction in bond-buying to begin early next year.
The likelihood of the wind-down being put off increased on Monday, with disappointing US pending home sales numbers.
Wall Street ended broadly flat ahead of the policy meeting, with the Dow and Nasdaq virtually unchanged but the S&P 500 tacked on 0.13 percent to hit a new all-time high.
The Fed s bond-buying scheme floods financial markets with dollars to keep interest rates down, which in turn keeps a lid on demand for the unit.
Asian stock markets ended mixed on Tuesday.
