LONDON, Jan 31:European stocks fell on Wednesday as caution prevailed before a US interest rate decision, but shares in London-listed Corus surged after Tata Steel clinched a multi-billion-dollar takeover of the group.

The British capital's FTSE 100 index of top shares shed 0.10 per cent to 6,235.50 points in early deals, Frankfurt's DAX 30 index sank 0.38 per cent to 6,762.60 and in Paris the CAC 40 retreated 0.56 per cent to 5,613.97 points.

The DJ Euro Stoxx 50 index of eurozone blue chip shares fell 0.49 per cent to 4,174.58 points.

The euro stood at 1.2939 dollars.

In New York, US shares had gained ground Tuesday as investors digested mixed earnings reports and positioned for the outcome of a US Federal Reserve two-day meeting expected to keep interest rates held steady.

Most analysts expect the US central bank, chaired by Ben Bernanke, to announce it is keeping its key federal funds rate pegged at 5.25 per cent.

Back in Europe, shares in Corus soared 6.84 per cent to 601.5 pence after Tata Steel bid 608 pence per share in an auction for the company, exceeding market expectations, dealers said.

The offer beat a bid from the only other bidder Companhia Siderurgica Nacional (CSN) -- which lost the auction with a 603 pence-per-share offer.

Tata's winning bid values Corus at 7.0 billion pounds (10.6 billion euros, 13.7 billion dollars) including debt.

On the downside, German semi-conductors giant Infineon saw its share price slide 1.97 per cent to 10.95 euros in Frankfurt trading after rival Hynix of South Korea warned that memory chip prices would fall 30.0 per cent this year.

Back on Wall Street on Tuesday, the blue-chip Dow Jones Industrial Average closed up 0.26 per cent at 12,523.31 points, while the technology-laden Nasdaq advanced 0.31 per cent to 2,448.64.

The broad-market Standard and Poor's 500 gained 0.58 per cent to 1,428.82 points.

—AFP