PARIS (AP) -- Global stocks mainly rose Wednesday as investors appeared increasingly confident that the U.S. Federal Reserve won't announce a reduction in its economic stimulus later.
The Fed's $85 billion of monthly bond purchases have kept U.S. interest rates low to encourage economic recovery, but have also sent a flood of money into stock markets worldwide in search of higher returns.
There are concerns that this new money has inflated stock prices beyond their rightful value and so prices have been volatile as investors try to gauge the impact of any Fed `tapering.'
"Tapering is likely the only thing on most investors mind today," said Alex Conroy, financial sales trader at Spreadex.
In Europe, investors were also encouraged by signs the Germany economy is picking up steam. The Ifo institute's closely watched business confidence index climbed to 109.5 points this month from 109.3 in November - a signal managers anticipate faster economic growth in the new year.
Germany's DAX rose 1.1 percent to 9,181.75 while France's CAC-40 closed up 1 percent to 4,109.51.
The FTSE index of British shares underperformed, closing only 0.1 percent higher at 6,492.08 after better than expected unemployment figures stoked speculation that the Bank of England may raise interest rates sooner than expected. That boosted the pound though, which was trading 0.7 percent higher at $1.6386.
In the U.S., trading was fairly muted in the run-up to the decision. The Dow Jones industrial average was up 0.2 percent to 15,898 while the broader S&P 500 index fell 0.1 percent to 1,779.
The dollar's near term fortunes will likely rest on what the Fed does. It was trading fairly flat in the run-up to the decision, with the euro down 0.1 percent at $1.3758.
Earlier in Asia, stocks mostly rose. Japan's Nikkei 225 closed 2 percent higher at 15,587.80, while Hong Kong's Hang Seng index climbed 0.3 percent to 23,243.82.
China's Shanghai Composite index edged down 0.1 percent to 2,148.29 and South Korea's Kospi finished 0.5 percent higher, at 1,974.63.
Associated Press writer Teresa Cerojano in Manila, the Philippines, contributed to this report.