European Markets Gain on Fed Reserve Taper Delay Hopes

European markets witnessed mixed trade in the opening minutes on 30 October, and traded higher thereafter, as market players awaited the US Federal Reserve's monetary policy decision.

The Stoxx Europe 600 index opened 0.2% higher to 321.46.

Britain's FTSE 100 opened 0.3% higher.

France's CAC 40 opened 0.1% lower.

Germany's DAX 30 opened 0.1% higher.

Spain's IBEX 35 was trading 1.14% higher after opening flat.

Italy's FTSE MIB was trading 1.08% higher after opening higher

The world's most powerful central bank will put out a statement at 1400 hrs Eastern Time, detailing its monetary policy.

Market participants the world over will be tracking the Fed announcement for clues as to the future pace of its asset-buying programme.

The Fed's $85bn (£52.7bn, €61.6bn) a month bond-buying stimulus has supported the US economy and markets the world over for a while now.

Standard Chartered said in a note to clients: "The Federal Open-Market Committee (FOMC) will conclude its two-day meeting today, releasing its statement at 14:00 ET (there is no press conference). The minutes of the September meeting showed that the decision not to taper its USD 85bn/month quantitative easing (QE) programme was a 'relatively close call' for several members. But we think that, given recent soft data and the 16-day government shutdown, the FOMC will be firmly in 'wait-and-see' mode at this meeting, keeping QE unchanged".

"The statement is expected to reflect that QE tapering, although still on the FOMC's horizon, is now off the table in the near term. It is likely to have a more prudent tone, particularly on how recent activity is characterised. It may take note of the recently softer payroll data (the average fell to 143,000/month in Q3, from 182,000 in Q2), and housing activity, as the rise in long-term rates due to tapering fears has taken its toll on the economy. Our main scenario remains QE tapering starting in March 2014", according to Standard Chartered.

Scotiabank said in a note to clients: "One possibility in the FOMC statement that will not be accompanied by forecast revisions or a press conference is that the Fed could strengthen forward rate guidance while leaving its bond purchase program unchanged at $85 billion amid no hints of tapering any time soon. This could include lowering the unemployment rate threshold at which a higher fed funds target rate would be considered".

"With the December 13th deadline for budget negotiations, the extension of funding for the US government until January 15th and the suspension of the debt ceiling until February 7th, the Fed will continue to caution on fiscal policy risks and may signal near-term growth downsides as a direct consequence of the government shutdown and the likely related confidence shock", according to Scotiabank.

"No sooner will the ink be dry on the statement than three Fed speakers will take to the stage on Friday. They include St. Louis Fed President James Bullard (voting 2013, nonvoting 2014), Minneapolis Fed President Narayana Kocherlakota (alternate 2013, voting 2014) and Richmond Fed President Jeffrey Lacker (nonvoting 2013, alternate 2014)", the Canadian bank added.

Meanwhile, data from Germany showed that the country's unemployment rate remained unchanged at 6.9%.

In Spain government data showed that GDP grew 0.1% in the third quarter of 2013, over the preceding quarter, confirming that the Spanish economy has exited a two-year-long recession.

Earlier in the week, Spanish lender Bankia posted a better-than-expected net profit, which optimists saw as evidence that the country's economy has turned a corner.

In company news, Italian automaker Fiat will put out its earnings update during the day.

British financial services major Barclays posted a 26% plunge in profits after the group reported a drop in trading revenue amid attempts to distance itself from the traditional investment banking model.

French pharmaceutical major Sanofi lowered its 2013 earnings forecast for the second time this year. Sanofi said its net profit for the third quarter fell to €1.21bn ($1.66bn) from €1.54bn a year ago. The group cited a slowdown in emerging markets as the reason for lower sales.

British insurer Standard Life, Germany automaker Volkswagen, Austrian bank Erste, Norway's Statoil and Netherlands-based TomTom have all released their earnings updates.

In Asia and the US

In Asia, Hong Kong's Hang Seng finished 2% higher on 30 October. The Shanghai Composite ended 1.48% higher, the Japanese Nikkei finished 1.23% higher, South Korea's Kospi closed 0.38% higher, and Australia's S&P/ASX finished 0.28% higher.

India's Sensex gained 0.5% and finished at a record high.

Earlier, markets traded higher, and followed Wall Street's record highs, ahead of the US Federal Reserve's monetary policy decision.

In China, the country's money market rates spiked to a four-month high on 30 October.

The seven-day repo rate, broadly considered a key measure of confidence to lend in the interbank markets, rose to around 5.59% - a 64 basis points increase over the previous day.

Earlier, data from Japan showed that industrial output rose 1.5% month-on-month in September, up from a 0.9% monthly decline in August.

On Wall Street, indices ended higher on 29 October, ahead of the Fed announcement. The Dow finished within 50 points of its record high and the S&P 500 struck a new high.

The Dow finished 111.42 points higher at 15,680.35.

The S&P 500 closed 9.84 points higher at 1,771.95.

The Nasdaq ended 12.21 points higher at 3,952.34.