BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - The European markets ended Wednesday's session with modest gains. Traders were in an upbeat mood after Italy's Economy Ministry announced Tuesday that an informal agreement had been made with the European Commission over its budget plan.
The deal was reportedly formalized on Wednesday at a meeting of EU commissioners in Brussels. The revised budget agreement will allow Italy to escape disciplinary measures by the EU.
Traders were also optimistic that the Federal Reserve will strike a more dovish tone in its announcement of its latest monetary policy decision this afternoon. The Fed is widely expected to raise interest rates by a quarter point, but traders will closely scrutinize the central bank's accompanying statement and forecasts for clues about future rate hikes.
The pan-European Stoxx Europe 600 index advanced 0.33 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.37 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.17 percent.
The DAX of Germany climbed 0.24 percent and the CAC of France rose 0.49 percent. The FTSE 100 of the U.K. gained 0.96 percent and the SMI of Switzerland finished higher by 0.14 percent.
In Frankfurt, Volkswagen gained 0.55 percent. The U.S. Justice Department said that Volkswagen supplier IAV GmbH has agreed to plead guilty and pay a $35 million fine for its role in the German auto giant's emissions-cheating scheme.
Consumer-electronics retailer Ceconomy plunged 16.64 percent after scrapping dividend and giving downbeat forecast for 2018/19.
In Paris, drug giant Sanofi advanced 0.79 percent. The company said it would transfer the listing of its American Depositary Shares from the New York Stock Exchange to The Nasdaq Global Select Market effective December 31, 2018, after market close.
In London, GlaxoSmithKline Plc jumped 3.78 percent after the company agreed to combine its consumer healthcare business with Pfizer Inc.
Gambling operator GVC Holdings fell 0.79 percent. The company noted that the U.K. government has enacted the cut in B2 gaming machine maximum staking levels to 2 pounds.
Royal Mail, which issued a shock profit warning in October, lost 2.37 percent.
Swiss Re rose 1.68 percent in Zurich. The company has estimated that natural catastrophes and man-made disasters will cost the insurance industry around $79 billion in 2018.
Eurozone construction output dropped in October after rising in the previous month, figures from Eurostat showed on Wednesday. Construction output fell 1.6 percent from September, when it grew 2.1 percent.
Germany's business confidence slid to its lowest level in over two years, reports said Tuesday, citing data from the Ifo survey. The Ifo Business Climate Index dropped to 101 from 102 in November. Economists had expected a score of 101.7.
Germany's producer price inflation remained at its highest level in 19 months in November, data from the Federal Statistical Office showed on Wednesday. Producer prices rose 3.3 percent year-on-year in November, same as in October. Economists had expected a 3.1 percent increase.
UK consumer price inflation slowed in November to its lowest level in twenty months, in line with economists' expectations, helped by falling petrol prices.
The consumer price index rose 2.3 percent year-on-year following a 2.4 percent increase in October, data from the Office for National Statistics showed on Wednesday. The latest inflation rate was the lowest since March 2017, when inflation was at the same level.
Existing home sales in the U.S. unexpectedly showed a significant increase in the month of November, according to a report released by the National Association of Realtors on Wednesday.
NAR said existing home sales surged up by 1.9 percent to an annual rate of 5.32 million in November after jumping by 1.4 percent to a rate of 5.22 million in October. Economists had expected existing home sales to drop by 0.6 percent.
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