European shares advanced for a second day

European shares advanced for a second day, heading for their biggest weekly jump since April, after the U.S. Federal Reserve said it would slow the pace of its bond buying. U.S. stock-index futures rose and Asian shares were little changed.

The Fed’s Open Market Committee said Dec. 18 that it will lower monthly asset purchases to $75 billion from $85 billion. The central bank also said it will probably hold key interest rates within the current range of zero to 0.25 percent “well past the time that the unemployment rate declines below 6.5 percent,” according to their statement.

In Germany, data from Nuremberg-based GfK SE showed a gauge of consumer confidence in Europe’s largest economy will climb to 7.6 in January from 7.4 this month, the highest reading since August 2007. A U.K. consumer sentiment index by GfK NOP Ltd. dropped 1 point in December from November to minus 13, the London-based research group said. The median forecast of 24 economists in a Bloomberg News survey was for a 1-point increase to minus 11.

The European Union lost its top credit rating from Standard & Poor’s, which cut its long-term rating to AA+ from AAA, citing weaker creditworthiness.

Telenet rose 2.6 percent to 41.98 euros. Goldman Sachs raised its rating on the stock to buy from neutral, citing growth prospects.

Financial companies and banks in the Stoxx 600 posted the biggest gains as a group. Italy’s Banca Monte dei Paschi di Siena SpA rallied 4.8 percent and Deutsche Boerse AG climbed 2.3 percent.

Carnival Corp. advanced 3.1 percent to 2,384 pence. Credit Suisse Group AG and Natixis SA raised their ratings on the shares after the world’s largest cruise operator posted fourth-quarter profit that beat analysts’ estimates yesterday.

BAE retreated 4.9 percent to 420.3 pence. Europe’s largest defense company said yesterday that the United Arab Emirates stopped talks to buy its Eurofighter Typhoon, just weeks after Prime Minister David Cameron personally lobbied for them in Dubai. Negotiations with Saudi Arabia over pricing are also dragging out, delaying BAE’s efforts to beef up its export business.

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