European shares advance in lead-up to Fed rate decision

European stocks rose on Tuesday, supported by financials, as markets drew closer to an expected start to the U.S. Federal Reserve's monetary easing cycle that could see policymakers deliver an outsized rate reduction.

The continent-wide STOXX 600 index .STOXX was up 0.6 per cent at 518.16 points, as of 0713 GMT, while Britain's FTSE 100 .FTSE outperformed its European peers with a 0.7% jump.

All sectors were trading higher, led by a nearly 1 per cent gain in financials .SX7P and a 0.8 per cent jump in banking shares.

Investors will be squarely focused on Fed's decision on Wednesday, with markets now pricing in a 67 per cent chance that the U.S. central bank could ease rates by 50 basis points.

In economic data, markets will closely monitor German sentiment survey at 0900 GMT that is expected to show a slight deterioration in September and U.S. retail sales, due at 1230 GMT, are forecast to have contracted in August on a monthly basis.

European Central Bank's supervisor Claudia Buch and board members Elizabeth McCaul and Frank Elderson will be speaking later in the day.

Among stocks, Kingfisher KGF.L was the top gainer, rising 6.6% after the European home improvement retailer raised the bottom-end of its profit outlook for the full year.

Shares of Barry Callebaut BARN.S climbed 6.2% after Barclays raised the stock's rating to "overweight" from "underweight".