European Markets Held Gains Ahead Of Fed Announcement

(RTTNews) - The European markets ended Wednesday's session in positive territory, bouncing back from the weakness of the previous day. Investor sentiment received a boost from Germany's Ifo business sentiment data and the surprise drop in British unemployment. However, investors remained cautious ahead of the announcement from the Federal Reserve later today on when it will begin tapering its $85 billion-per-month bond-purchase program.

Eurozone finance ministers on Tuesday agreed to disburse EUR 1 billion of bailout installment to Greece as part of the third review of the country's economic adjustment program.

"I note with satisfaction that Greece has achieved the four milestones agreed with the Troika institutions in the context of the third review of its economic adjustment program," Eurogroup President Jeroen Dijsselbloem said.

Eurozone finance ministers concluded their meeting early Wednesday, claiming some progress in the banking resolution talks, boosting optimism that the finance ministers of 28 EU countries will be able to strike a deal at a formal gathering later today.

Media reports suggested that the euro area ministers have reached a key agreement on backstops for funding future bank failures. However, the ministers gave no details of the agreement.

Meanwhile, the European Parliament and the EU member states reached a political agreement on the new rules on Deposit Guarantee Schemes (DGS) on Tuesday, taking one more step closer to the Banking Union.

Policymakers were unanimous in the decision to hold the interest rate and quantitative easing early this month, as they chose to wait-and-watch, the Bank of England said on Wednesday. Elsewhere, the labor market statistics today hinted that the unemployment rate would fall more rapidly to the 7 percent threshold of the central bank's forward guidance as economic recovery gathers strength.

The nine-member Monetary Policy Committee voted to retain the 0.50 percent record low interest rate and quantitative easing at GBP 375 billion, the minutes of the meeting held on December 4 and 5 showed Wednesday.

At the meeting, all members agreed that neither of the price stability knockout conditions that would override the policy guidance provided in August had been breached.

Moreover, a recovery in output appeared to be underway, and inflation had fallen and was expected to remain close to the 2 percent target. The minutes said no member thought it appropriate to tighten, or to loosen, the stance of monetary policy at the current juncture.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.04 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.85 percent.

The DAX of Germany climbed by 1.06 percent and the CAC 40 of France advanced by 1.00 percent. The FTSE 100 of the U.K. rose by 0.09 percent and the SMI of Switzerland gained 0.64 percent.

In Frankfurt, TUI climbed by 3.65 percent after it reported results.

In Paris, Technip declined by 6.27 percent. The company sees subsea revenue for 2014 in the range of 4.35 billion euros to 4.75 billion euros.

In London, BP dipped by 0.02 percent, after announcing a significant discovery in the Gulf of Mexico.

Marks & Spencer fell by 2.39 percent. UBS downgraded the stock to ''Neutral'' from ''Buy.''

Centrica climbed by 1.73 percent, after it announced the sale of three gas-fired power stations in Texas.

Darty gained 3.45 percent. The firm reported a loss for the first half of the year, but remains confident to deliver an improvement in earnings over the medium term.

Elektrobit, which raised its annual profit outlook, surged by 6.67 percent in Helsinki.

Vestas Wind Systems gained 5.30 percent in Copenhagen, after it received a U.S. order.

Eurozone's construction output fell at a faster rate in October than in the previous month, data released by Eurostat revealed on Wednesday. Construction production dropped 2.4 percent year-on-year, after a 0.7 fall in September that was revised from 0.2 percent. The decline was the biggest since May, when output decreased 3.7 percent.

Optimism among German businesses surged to its highest level in twenty months in December, signaling that the economy could carry the growth momentum through next year. A survey by the Ifo Institute showed Wednesday that its business climate index for the industrial and trade sectors rose to 109.5 in December from 109.3 in November. The reading was the highest since April 2012 and matched economists' forecasts.

The U.K. claimant count fell slightly to 3.8 percent in November from 3.9 percent in October, the Office for National Statistics said Wednesday. The rate matched economists' expectations. The number of people claiming Jobseeker's Allowance fell by 36,700 to 1.27 million, the lowest figure since January 2009. Economists were expecting a fall of 35,000.

U.K. retail sales recovered strongly in December driven by the rebound in grocers, department stores and clothing shops, the latest Distributive Trades Survey from the Confederation of British Industry showed Wednesday.

Nearly 48 percent of respondents reported that sales were up on a year ago, while 14 percent said they were down, giving a balance of +34 percent, the report said. The expected balance was +10 percent.

New residential construction showed a substantial increase in the month of November, according to a report released by the Commerce Department on Wednesday, with housing starts jumping to their highest level in over five years.

The report said housing starts surged up 22.7 percent to a seasonally adjusted annual rate of 1.091 million in November from a rate of 889,000 in October. Economists had expected housing starts to come in at an annual rate of 955,000.

Meanwhile, the report also showed that building permits fell by 3.1 percent to a seasonally adjusted annual rate of 1.007 million in November from the revised October rate of 1.039 million. Building permits had been expected to show a steeper decrease to a rate of 990,000.