European shares mainly firm before Fed rate meeting

European stocks mostly firmed on Tuesday in cautious trade before the US Federal Reserve's latest monetary policy meeting and ahead of rate calls in Frankfurt and London later this week. The Paris benchmark CAC 40 index of top shares added 0.14 percent to 3,325.16 points and Frankfurt's DAX 30 won 0.49 percent to 6,807.17 in midday deals. Madrid won 1.13 percent and Milan gained 0.58 percent. However, London's FTSE 100 dropped 0.18 percent to 5,683.12 points in late morning trade, hurt partly by disappointing results from energy major BP. In foreign exchange deals, the euro drifted upwards to $1.2271 from $1.2259 in New York late Monday. Hopes for new stimulus by the Fed have been heightened by weak US growth data, while European leaders and European Central Bank chief Mario Draghi have pledged to do whatever is necessary to protect the euro. The US central bank starts a two-day meeting later Tuesday. On Thursday, the ECB and the Bank of England unveil their latest monetary policy decisions, as both grapple with the eurozone debt crisis. "The month is looking likely to end on a quiet note, as investors enter 'wait and see' mode in advance of policy decisions from the Fed, the Bank of England and the ECB," said analyst Chris Beauchamp at traders IG Index. "As the important events get closer, the sunny optimism that suggested policymakers would unveil impressive new measures has been replaced by nagging uncertainty." The Fed gathering comes after the US government reported last week that growth in the world's biggest economy slowed to 1.5 percent in the second quarter from 2.0 percent in the first, stoking hopes of new action. "Investors are waiting for three major central bank meetings," said trader Anita Paluch at Gekko Global Markets. "The choppy trade in the atmosphere of anticipation is not helped by the earnings either," she said. "Although Fed is facing weaker macroeconomic readings, they are not as weak to make a convincing case for a significant change in its policy." In company earnings news, BP tumbled 4.0 percent to 426.69 pence, topping the FTSE 100 fallers board after plunging into the red during the second quarter. The British energy giant BP made a loss after tax of $1.39 billion in the three months to June, hit by lower output, falling oil prices and a near $5.0-billion (4.1-billion-euro) writedown on the value of assets. In Frankfurt, Deutsche Bank fell 0.76 percent to 24.65 euros after its net profit was nearly halved by the eurozone debt crisis in the second quarter. Germany's biggest lender said its net profit fell to 661 million euros ($811 million) in the April-June period from 1.2 billion euros a year earlier, while revenues declined 6.0 percent to 8.0 billion euros. On the upside, German retail giant Metro rallied 3.26 percent to 22.46 euros after it confirmed its full-year outlook but also booked a second-quarter net loss of 20 million euros. Asian markets were generally higher Tuesday, their third consecutive positive session, as traders looked for new stimulus measures. Tokyo closed up 0.69 percent amid hopes for a firm recovery by Japanese high-tech manufacturers before they released quarterly earnings. Sydney added 0.55 percent, Seoul finished 2.07 percent higher and Hong Kong rose 1.08 percent but Shanghai was down 0.30 percent on fears that a slowing Chinese economy may hurt corporate earnings.