LONDON, May 9: Europe's main stock markets rose on Wednesday as investors looked to rumours of a gigantic takeover of Rio Tinto by Anglo-Australian mining giant BHP Billiton.

Dealers also eyed upcoming interest rate decisions, due later on Wednesday from the US Federal Reserve, while the European Central Bank and the Bank of England make their latest rate calls on Thursday.

In late morning European trade on Wednesday, London's FTSE 100 index added 0.37 per cent to 6,574.40 points.

Frankfurt's DAX 30 won 0.36 per cent to 7,469.33 points in early afternoon deals and the Paris CAC 40 increased 0.29 per cent to 6,052.03 points.

The euro stood at 1.3545 dollars.

Wall Street shares had ended nearly flat on Tuesday as blue chip shares took a breather from recent meteoric gains and traders displayed caution ahead of the looming Fed meeting, which was expected to hold US rates at 5.25 per cent.

Japanese share prices closed with gains on Wednesday, helped by a recent softening of the yen and upbeat earning forecasts from domestic shipping firms.

In London, shares in Anglo-Australian mining giant Rio Tinto soared by 6.23 per cent to 3,511 pence amid rumours of a possible takeover offer from larger rival BHP Billiton, dealers said.

In Sydney, where the group is also listed, Rio Tinto jumped by 11.1 per cent to a record intra-day high of 99.69 Australian dollars as the rumours swept the market, but pared some gains before the close.

There is talk of a merger among the big miners but I don't think that's for real, said Brewin Dolphin Securities analyst Mike Lenhoff.

Rio Tinto said in Sydney that it was unaware of any takeover approach from BHP Billiton after receiving a formal query from the Australian Stock Exchange about its share price spike.

BHP Billiton saw its share price jump 3.04 per cent to 1,221 pence, while peers Kazakhmys and Vedanta Resources gained 3.57 per cent and 2.74 per cent respectively, to stand at 1,220 pence and 1,424 pence.

In Paris meanwhile, shares in BNP Paribas surged 3.71 per cent to 90.75 euros after the French bank reported a 24.5-per cent surge in first-quarter profits to 2,507 billion euros ($3.4 billion).

BNP Paribas was boosted from a takeover in Italy and from unexpectedly strong retail operations in France.

On Thursday, the European Central Bank and Bank of England present their latest interest-rate decisions.

The ECB is expected to hold eurozone borrowing costs at 3.75 per cent ahead of a quarter-point rise in June, while the BoE is widely forecast to raise its rate this week by 0.25 basis points to 5.50 per cent.

The Nasdaq composite finished up a slight 0.03 per cent at 2,571.75 while the broad-market Standard and Poor's 500 index lost 0.12 per cent to 1,507.72.—AFP