Europe close: Stocks finish on mixed note ahead of Fed rate decision

European stocks were mixed by the end of the trading on Wednesday as investors geared up for a Federal Reserve policy announcement in the evening and eyed the latest news on progress in Sino-US trade talks.

By the end of trading, the Stoxx 600 was edging higher to 398.70, as Germany's Dax dipped 0.23% to 12,910.23 and the French CAC 40 added 0.45% to 5,765.87. Meanwhile, London's FTSE 100 was 0.34% higher at 7,330.78.

The US Federal Reserve was expected to announce a 0.25% cut to the target range for short-term official interest rates when it makes its policy announcement at 1800 GMT.

IG analyst Joshua Mahony said: "With market expectations signalling a 93% chance of a rate cut today, we are instead seeing a focus on the outlook, with markets expecting to wait until April 2020 to see the next 25 basis-point move."

Meanwhile, optimism over a trade deal between the United States and China faltered as an American official cited by Reuters said a phase one agreement might not be completed in time for signing at the APEC summit in Chile next month, as had previously been expected.

Possibly complicating matters further, in the wake of the recent violent protests, Chilean officials decided to cancel the APEC summit scheduled for 16-17 November at which it was hoped that the US and China would ink a preliminary trade deal.

In the UK, a pre-Christmas general election was on the cards after Labour leader Jeremy Corbyn threw his weight behind the idea, with Prime Minister Boris Johnson's bill for a 12 December vote now just requiring approval from the House of Lords.

XTB analyst David Cheetham said: "When MPs voted against the timetable motion on the latest withdrawal agreement bill and effectively ended all hopes of passing it by Boris Johnson’s “do or die” pledge of October 31st, the government’s policy became clear - to push for an election.

"While they currently have a healthy lead in the polls, it is worth remembering Boris’s predecessor Theresa May and how badly her decision to call the last election in 2017 to increase her majority backfired spectacularly."

Among individual stocks, Fiat Chrysler and PSA Peugeot Citroen were both higher after confirming they are in talks over a possible merger.

L'Oreal was also in the green after the French cosmetics maker beat third-quarter revenue forecasts following strong demand in China, India and Japan.

German lubricant maker Fuchs Petrolub was another top riser on the Stoxx 600 after it managed to slow its decline in third-quarter profit thanks to cost control measures.

Italian tyre maker Pirelli saw its share price deflate after slashing its guidance for operating profit margin and cash flow, while also delaying the presentation of a new business plan.

Deutsche Bank was among the top fallers after it fell short of expectations as it reported a net loss of €832m for the three months ended 30 September as it ploughs ahead with a vast restructuring programme.

Swiss lender Credit Suisse dropped despite beating third-quarter net income expectations as it warned that it expected headwinds from the "challenging geopolitical environment" to persist into the final quarter of the year.