European shares gained ground for a second straight session Wednesday, as the Federal Reserve's decision to keep U.S. interest rates steady and its optimistic take on the world's largest economy heartened investors and pushed credit-market worries to the background, according to AP. The U.K.'s FTSE 100 index closed up 1.4 percent at 6,393.90, the German DAX index increased 1.3 percent to 7,605.94 and the French CAC-40 index advanced 2.3 percent to 5,749.29. «After reassuring comments from the Fed, this seems like a natural bounce,» said Felix Lanters, head of portfolio management at Theodoor Gilissen Bankiers in Amsterdam. Investors in Europe welcomed the Fed's move to keep rates on hold at 5.25 percent for the ninth straight month and its words of reassurance on the broader economy. The U.S. central bank said it still expects moderate growth in coming months, despite volatile financial markets, tighter credit conditions and the ongoing correction in the housing market. Equity markets in Europe have been turbulent, first selling off heavily and then enduring several sessions of unpredictable movement, both up and down. Lanters said he expects markets to remain volatile. «Fundamentals are still good, the earnings outlook is still good and the economy is resilient. However, higher risk premiums are not likely to go away,» he said. Financials, such as insurance firms, pushed ahead again Wednesday as investors attempted to recoup recent losses. AXA climbed 3.6 percent in France, while Aegon rose 3.7 percent in Amsterdam and Swiss Life advanced 1.4 percent in Zurich. Profit updates helped some British insurers, with shares of Royal & Sun Alliance up 3.7 percent and Friends Provident up 2.6 percent. Royal & Sun's first-half operating profit drop of 3 percent wasn't as sharp as analysts had forecast, while Friends Provident said first-half pretax profit more than doubled. ING Group climbed 4 percent after the Amsterdam financial-services giant reported second-quarter net income rose 27 percent, led by results from banking and life insurance and helped by cost controls. European banks were also stronger for the second day in a row. Shares of Anglo Irish Bank rose 4.4 percent, and Natixis added 5 percent. STMicroelectronics jumped 5.7 percent after Nokia selected the chipmaker as a supplier for 3G chipsets. Nokia's shares rose 3.7 percent. Danish brewer Carlsberg advanced 2.7 percent after raising its earnings outlook for the year. It also reported an 18 percent drop in second-quarter profit, with revenue up 10 percent. Scottish & Newcastle rose 1.3 percent in London after UBS upgraded it to buy from neutral. Germany's Adidas AG gained 0.5 percent after saying second-quarter net profit rose 27 percent as the sportswear and equipment maker realized synergies from its Reebok acquisition and had lower expenses in connection with the takeover. In London, Vodafone Group shares climbed 2.1 percent as the mobile-phone giant said it won't exercise an option to sell part of its 45 percent interest in U.S. mobile joint venture Verizon Wireless.
