European markets opened in mixed trade on Tuesday, following a negative overnight performance in Tokyo. Investors were also looking to see the outcome of the meeting of the European Central Bank council - its last before the launch of the euro.

In Washington, the Federal Reserve's policy-making open market committee will also hold its regular meeting. Frankfurt

Germany's Xetra Dax bounced back by midday after a weak opening. The electronic index rose 80.39 points to 4861.32 by 1200 GMT.

Pressure on profit-taking after Monday's 159.96 point rally was offset by a firmer dollar.

Paris

French shares also shrugged off a sluggish beginning to rally 34.45 points to 3837.53 by 1200 GMT.

Among corporate news, the focus was on luxury goods group LVMH, after earlier reports that it is thinking of selling part of its stake in UK wine and spirits group Diageo. LVMH has denied the rumours, but traders remained sceptical.