LONDON, June 27: European stocks advanced on Tuesday, with the energy sector benefiting from higher oil prices and after overnight gains on Wall Street, dealers said.But they added that gains were capped by uncertainty over the outlook for US interest rates beyond an expected quarter-point hike by the Federal Reserve on Thursday.

In Tuesday trading, London's FTSE 100 index of leading shares won 0.10 per cent to 5,686.80 points, Frankfurt's DAX 30 index increased also by 0.10 per cent to 5,520.04 points and in Paris the CAC 40 gained 0.15 per cent to 4,808.70.

The DJ Euro Stoxx 50 index of leading eurozone shares added 0.13 per cent to 3,539.35 points.

The euro stood at 1.2567 dollars.

US shares had posted modest gains on Monday as a flurry of global merger and acquisition activity helped ease market anxiety about a Federal Reserve decision on interest rates.

Japanese share prices inched higher on Tuesday as the market opted to wait for a closely watched US Federal Reserve decision on interest rates later this week, dealers said.

Energy majors got a lift in European trading from the rising price of crude.

In Paris, the share price of French oil giant Total jumped 0.97 per cent higher to 49.76 euros. In London, oil company BP won 0.74 per cent to 614 pence while BG Group saw its shares gain 0.79 per cent to 702.5 pence.

Back in Paris, shares in European steel group Arcelor retreated by almost 1.5 per cent to 37.24 euros.

The stock had rocketed by nearly 8.0 per cent the previous day in the wake of the company's agreed 27.4-billion-euro ($34.4-billion) merger with sector rival Mittal Steel.

Back in US trading on Monday, the Dow Jones Industrial Average climbed 0.51 per cent to 11,045.28 points while the Nasdaq composite advanced 0.58 per cent to 2,133.67 points.

The broad-market Standard and Poor's 500 index increased 0.49 per cent to 1,250.56 points.

Sentiment was lifted by a blockbuster deal in the mining sector in which US giant Phelps Dodge agreed to buy Canadian rivals Inco and Falconbridge for about 40 billion dollars, forging the world's largest nickel company and a leading copper miner.—AFP