LONDON: European stock markets traded mostly higher on Wednesday, awaiting the outcome of the Fed's policy meeting, while investors kept a close watch on the Ukraine crisis.
But London's benchmark FTSE 100 index slid 0.19 percent to 6,593.00 points in afternoon trading despite upbeat British unemployment data and the government revising up its 2014 growth forecast to 2.7 percent when it presented its latest budget.
The CAC 40 in Paris edged up 0.04 percent compared with Tuesday's closing values to 4,314.83 points, while Frankfurt's DAX 30 rose 0.50 percent to 9,288.47.
Madrid's IBEX 35 index gained 0.50 percent while Milan shed 0.17 percent.
"Today is a big day for the UK and the US," said David Madden, analyst at IG traders, pointing to the budget and the Federal Reserve announcement -- "the latter having more of an impact to the markets."
In the United States, the Fed is not expected to move off its current course of steadily tapering its stimulus programme following the end of its two-day meeting in Washington on Wednesday.
US stocks drifted lower at the opening of trade as they waited for Fed announcement.
Five minutes into trade, the Dow Jones Industrial Average dipped 0.04 percent to 16,329.87 points.
The broad-based S&P 500 also lost 0.04 percent to stand at 1,871.45, while the tech-rich Nasdaq Composite Index slipped 0.07 percent to 4,330.12 points.
Investors are meanwhile hoping for some guidance from the US central bank's new head Janet Yellen on her plans for its key interest rate, which is not yet expected to be lifted from its current 0-0.25 percent, where it has been since late 2008.
Yellen will likely use her press conference "to announce that even if the unemployment rate falls below the previously set target of 6.5 percent, then the Fed will not raise rates and instead rely on other additional economic indicators to measure the strength of the economy", predicted Markus Huber, senior trader at brokers Peregrine & Black.
In foreign exchange trade, the euro slipped to $1.3917 from $1.3932 late on Tuesday in New York.
The pound jumped to 1.195 euros from 1.1908 and to $1.6631 from $1.6587.
Britain also announced it was ditching the one pound coin it has used for the past three decades and replacing it with a 12-sided piece that will be harder to fake.
On the London Bullion Market meanwhile, the price of gold fell to $1,346 an ounce from $1,355.75 on Tuesday.
On the corporate front, shares in BMW surged 7.4 percent to 86.69 euros after the German top-of-the-range carmaker said it expected pre-tax profit to rise sharply this year after record sales and earnings in 2013.
In Paris, shares in mining company Eramet jumped 7.2 percent to 76.10 euros thanks to rising nickel prices, traders said.
A ban on nickel exports by Indonesia since January, combined with concerns about possible sanctions against Russia for its takeover of the Black Sea peninsula of Crimea after it voted in a disputed referendum to leave Ukraine, had led to increases in prices.
Tensions mounted Wednesday in the worst East-West standoff since the Cold War as pro-Russian forces captured Ukraine's naval commander after seizing his headquarters in Crimea.
The European Union and United States have vowed to step up sanctions against Russia after a defiant President Vladimir Putin had brushed aside global indignation to sign Tuesday a treaty absorbing Crimea and expanding Russia's borders for the first time since World War II.
Although Russia moved quickly to absorb Crimea, markets were reassured Tuesday by Putin's statements that he doesn't want to split up Ukraine or sever ties with the West, and posted solid gains.
"As far as Ukraine is concerned, the market seems to be content that watered down US sanctions coupled with yesterday's Putin statement is enough to suggest any pending catastrophe can be shelved in the short term," said trader Toby Morris at CMC Markets UK.
However he noted that "what Putin says and does doesn't always tally up, and anyone invested in this market will still have one eye on events in Crimea until a long-term solution is acknowledged by both sides."
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