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London - British stocks moved higher on Wednesday on falling unemployment, but uncertainty ahead of a critical ECB meeting that could launch a radical economic stimulus policy kept eurozone equity trading jittery.
Frankfurt's DAX 30 shed 0.33% compared with Tuesday's close to 10 223.71 points in afternoon trading while the CAC 40 in Paris added 0.15% to 4 452.91.
Milan was up 0.34% while Madrid was off 0.35
Meanwhile London's benchmark FTSE 100 index of top companies won 0.84% to 6 675.65 points, lifted by news that British unemployment has struck another six-year low and expectations that a Bank of England rate hike is a long way off.
Investors widely expect that the European Central Bank will decide on Thursday to begin a sovereign bond-buying programme, known as quantitative easing (QE), to boost the sagging 19-nation economy and combat deflation, but analysts and investors remain uncertain over the exact size of the stimulus.
"While very few doubt that the ECB will announce some kind of a QE tomorrow there are still plenty of speculations about the size of the QE and specifics - like who exactly will do the buying, individual central banks or the ECB, and who will shoulder the risk," said analyst Markus Huber at broker Peregrine & Black.
The European single currency firmed to $1.1588 from $1.1553 late in New York on Tuesday, when it was hit by persistent QE speculation.
Some analysts have suggested that the ECB's QE programme could include at least €500bn of government debt and up to €250bn of other non-financial corporate debt.
A report by Bloomberg on Wednesday said the ECB's board had drawn up a proposal to buy €50bn of sovereign bonds per month until the end of 2016, an injection that would be worth €1.1trn.
Size of QE 'crucial'
"The size of this QE package is absolutely crucial for the markets and how the markets will react," Forex.com research director Kathleen Brooks told AFP.
"Anything below €500bn would be considered a real disappointment, largely because it would just be a drop in the ocean, especially compared to QE programmes that we've got used to, things that came out of the Federal Reserve or the Bank of Japan."
She added there was a large political risk attached to QE stimulus in the 19-nation euro currency area, particularly for eurozone powerhouse Germany.
"There's a huge political cost to doing QE in the eurozone, because largely it means risk-sharing," Brooks said.
"So if your central bank is buying up the assets of various member states, then all of a sudden Germany, in particular - they've got the biggest economy in the eurozone - could be liable if those states don't pay back the central bank."
Meanwhile analyst Tony Cross at traders Trustnet Direct said: "Tomorrow's ECB verdict remains top of the agenda from a global markets perspective and any disappointment could inject a degree of panic".
Tokyo slides on BoJ
Elsewhere on Wednesday, Tokyo shares fell, countering a broad rally in Asian markets after the Bank of Japan (BoJ) slashed its inflation forecast and held off fresh easing measures after a two-day meeting.
The yen rose against both the dollar and the euro on the news, however, as traders took solace in the BoJ's announcement that it was also raising Japan's growth outlook on signs the economy was rebounding.
Tokyo's benchmark Nikkei 225 index closed 0.49% lower.
Japan was the exception, however, as a broad rally across Asian markets saw Hong Kong rise 1.6% and Shanghai rally 4.74%.
Sydney gained 1.62% and Seoul won 0.15% in value.
US stocks moved mostly lower, with the Dow Jones Industrial Average sliding 0.09% to 17 500.04 points and the broad-based S&P 500 dipping 0.03% to 2 021.97 in the first hour of trading. The tech-rich Nasdaq Composite added 0.06% to 4 657.70.
