European shares rise in choppy trade ahead of Fed

* FTSEurofirst 300 up 0.2 percent

* Investors await U.S. Federal Reserve’s policy meeting

* Mining, construction shares among top gainers

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Sept 21 (Reuters) - European shares edged higher in morning trade on Tuesday, supported by miners, as investors awaited a U.S. Federal Reserve meeting to see if the central bank announces measures to support economic recovery.

At 0831 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.2 percent at 1,089.76 points after rising 1.4 percent on Monday.

The market stayed choppy, with the index falling in early trade before turning positive, as focus remained on the Fed meeting. Faced with a 9.6 percent jobless rate and below-target inflation, Fed policymakers are trying to gauge how much they could achieve if they resume massive quantitative easing.

“One would suspect that the Fed is likely to remain as accommodative as possible in its effort to secure the economic recovery,” said Henk Potts, strategist at Barclays Wealth.

“I don’t think we will see any change in the language today. We won’t see a dramatic reaction, although the potential for a further round of quantitative easing could well be of more interest to the market participants.”

Few analysts expect the Fed to launch a new round of bond buying this week, and uncertainty over the impact of fresh moves may be a factor limiting options for the central bank.

“Investors are waiting on the sidelines. Yesterday the market went up in anticipation that the Fed can do something about the economy, but I think people are ignoring the macroeconomic condition,” said Koen De Leus, economist at KBC Securities in Brussels.

“There is not going to be too much change in the language of the Fed. I think they are going to keep the interest rates low for an extended period of time.”


For preview on Fed meeting: [ID:nSGE68J04M]

For graphic on Fed's balance sheet:



Miners featured among the top gainers as metals prices turned positive ahead of the Fed meeting. Anglo American AAL.L, Antofagasta ANTO.L, Rio Tinto RIO.L and Xstrata XTA.L rose 0.2 to 0.9 percent.

BHP Billiton BLT.L was up 0.3 percent. Its $39 billion battle to take control of Canada's Potash Corp POT.TO is expected to drag on into next year after it failed to win immediate backing from Canadian authorities. [ID:nN20100852]

Construction and materials shares gained ground, with the sector index .SXOP rising 1 percent on hopes of a sustained economic recovery. Ferrovial FER.MC, CRH CRH.I and Saint-Gobain SGOB.PA rose 1.5 to 1.8 percent.

The Euro STOXX 50 .STOXX50E, the euro zone's blue-chip index, gained 0.4 percent to 2,812.65 points and traded above its 200-day moving average.

Across Europe, the FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC 40 .FCHI rose 0.3 to 0.5 percent. (Editing by Michael Shields)