- German business confidence grows
- Eurozone agrees backstop deal for banks
- UK unemployment drops unexpectedly
- Federal Reserve to release policy decision
FTSE 100: 0.09%
CAC 40: 1.00%
FTSE MIB: 1.15%
IBEX 35: 1.07%
Stoxx 600: 0.86%
European stocks gained as German business confidence improved and as Eurozone finance ministers agreed to a backstop for failing banks.
German business sentiment improved in line with expectations in December, according to a survey of about 7,000 companies today.
The Ifo institute's business confidence index climbed to 109.5 from 109.3 in November, the highest level since April 2012.
Meanwhile, Eurozone finance ministers agreed today to provide a common backstop, by at least 2025, to the European Union's (EU) new bank rescue system in case it runs out of money in an emergency.
Ministers agreed a way to finance the closure of banks which fail including a €55bn fund which will be built up over the next decade by levies on banks.
The deal marks a step closer to completing the final details of a banking union across the 17 countries to tackle failing lenders in Europe's banking union.
UK unemployment falls
UK unemployment declined unexpectedly by 99,000 to 2.39m people in the three months to October, according to the Office for National Statistics (ONS).
The unemployment rate, measured by International Labour Organisation methods also fell to 7.4% from 7.6% in the quarter through September - moving closer to the Bank of England's (BoE) threshold of 7% at which it will consider raising interest rates.
This morning the BoE released minutes of its December 4th to 5th meeting, which revealed policymakers voted unanimously to keep its Bank Rate at 0.5% and its asset purchase programme at £375bn.
The minutes also showed the central bank's Monetary Policy Committee (MPC) warned the recent appreciation in sterling could jeopardise British exports.
"Any further substantial appreciation of sterling would pose additional risks to the balance of demand growth and to the recovery," the MPC said in the minutes.
Federal Reserve policy decision
The US Federal Reserve will unveil its latest policy decision later today after it wraps up its two-day meeting.
The central bank may decide to begin scaling back quantitative easing if it deems the economy has recovered enough to cope.
A recent slate of upbeat economic data has fuelled speculation that the Fed may begin tapering today.
"Will they? Won't they? Tapering is likely the only thing on most investors mind today ahead of the [Fed's] decision on whether to finally taper the unprecedented $85bnn monthly bond-buying scheme," said Alex Conroy, Financial Sales Trader at Spreadex.
"If the last few months are anything to go buy expect huge volatility today as investors attempt to get ahead of the Fed."
Acting as a backdrop was the release of a report on US housing starts which rose more than expected to a seasonally adjusted annual rate of 1.09m in November from 889,000 the previous month.
jumped after the energy company said it would sell its Texas gas-fired power stations to Blackstone for $685m and use the proceeds to extend its share buyback programme.
Technip tumbled after the French oilfield services company warned that it expects margins will fall next year.
TUI AG gained after the tour operator unexpectedly posted a full-year profit.
Elektrobit surged after the Finnish maker of software products for the automotive industry forecast operating profit of about €8m in 2013.
GlaxoSmithKline retreated as Vectura Group said its partner Sandoz has obtained approval to market its asthma inhaler, a generic version of Glaxo's Advair, in Denmark.
Marks & Spencer Group dropped as UBS downgraded the retailer to 'neutral' from 'buy', citing lower gross margins.
Vesta Wind Systems advanced after saying it received an order from Enel Green Power for wind turbines to produce 350 megawatts of power.
The euro fell 0.04% to $1.3763.
Brent crude futures rose $0.814 to $109.330 per barrel, according to the ICE.