European stocks advanced ahead of Fed rate decision Reuters

(Reuters) – European shares rose on Tuesday, supported by financials, as markets edged closer to an expected start to the U.S. Federal Reserve’s monetary easing cycle, which could prompt policymakers to offer exaggerated tapering of the interest rate.

The continent-wide index rose 0.6 percent to 518.16 points as of 0713 GMT, while the 100 outperformed its European peer with a 0.7 percent gain.

All sectors were trading higher, led by a nearly 1 percent gain in financials and a 0.8 percent jump in banking stocks.

Investors will be focused on the Fed’s decision on Wednesday, with markets now showing a 67% chance the US central bank will cut rates by 50 basis points.

In economic data, markets will closely monitor Germany’s sentiment survey at 0900 GMT, which is expected to show a slight deterioration in September, and US retail sales, due at 1230 GMT, are expected to contract monthly in August .

European Central Bank Governor Claudia Buch and board members Elizabeth McCaul and Frank Elderson will speak later in the day.

Of the stocks, Gull (LON: ) was the biggest gainer, up 6.6% after the European home improvement retailer raised its low-end full-year profit outlook.

Shares in Barry Callebaut rose 6.2 percent after Barclays upgraded the stock to “overweight” from “underweight.”