* FTSEurofirst 300 up 0.1 percent
* Strong underlying results from BP support oil majors
* Cautious trade expected ahead of Fed decision on Wednesday
By Harpreet Bhal
LONDON, Nov 2 (Reuters) - European shares edged up on
Tuesday with oil majors supported by upbeat underlying results
from BP <BP.L>, though trade was choppy ahead of the U.S.
Federal Reserve's decision on monetary easing on Wednesday.
By 1003 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was up 0.1 percent at 1,089.48 points in
choppy trade on low volumes of just 23 percent of the index's
average 90-day trading volume.
Investors were reluctant to take on large positions ahead of
a two-day Fed meeting, ending on Wednesday and widely expected
to include an announcement of further quantitative easing
measures, and U.S midterm elections which could alter the
balance of power in the House of Representatives.
Banks were lower, with Barclays <BARC.L>, BNP Paribas
<BNPP.PA> and Commerzbank <CBKG.DE> off 0.4-0.6 percent.
Despite widespread expectation the Fed will resume a
programme of large-scale asset purchases to spur economic
recovery, uncertainty lingered over how much it will eventually
spend -- with dealers expecting asset buying of $80-$100 billion
per month. []
"The markets had a good run anticipating QE (quantitive
easing) and the issue is how much they (Fed) commit to doing
upfront," said Bernard McAlinden, investment strategist at NCB
Stockbrokers in Dublin.
BP <BP.L> rose 1.8 percent as investors focused on a
forecast-beating rise in underlying profit, looking beyond an
increased estimate of the likely cost of its Gulf of Mexico
spill to $40 billion which dented third-quarter results.
[]
BP shares have fallen 28 percent this year, against a 5.9
percent rise on the FTSE 100 in the same period.
"This underperformance... may mean that the shares have
already taken the brunt of the pressure. As such, the market
consensus is that BP remains a buy for the longer term," Richard
Hunter, head of UK equities at Hargreaves Lansdown said.
Within the energy sector, BG Group <BG.L> added 2.1 percent
after the gas producer posted a 12 percent rise in third-quarter
net profit and significantly upgraded its Brazilian resources.
[]
EUROZONE FACTORIES PICK-UP
Helping to bolster positive sentiment, a business survey
showed euro zone manufacturers boosted output in October at a
faster pace than previously estimated, with Ireland and Spain
both recovering while Greece continued to struggle.
Industrial goods companies Prysmian <PRY.MI>, Schneider
Electric <SCHN.PA> and Siemens <SIEGn.DE> added 0.4-0.8 percent.
The Markit Eurozone manufacturing Purchasing Managers Index
(PMI) followed strong U.S. manufacturing growth data on Monday,
which helped boost confidence in the pace of economic recovery.
"It won't be bad news ...if the Fed were to disappoint in
how much they commit to right now if that is against the
backdrop of strong data. If the data is strong we do not need
QE," McAlinden said.
In contrast to the Fed's expected monetary easing measures,
the ECB was seen sticking to its exit path when meeting on
Thursday, on the view that the euro zone's recovery has enough
momentum to ride out any bumps in the road in the months ahead.
[]
Among other movers, Dutch chemicals group DSM <DSMN.AS> fell
3.9 percent after reporting third-quarter operating profit at
the low end of estimates, ending a run of positive earnings
surprises. []
(Editing by Dan Lalor)
