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CAC 40 Advances As Fed Signals Rate Cut

French stocks advanced on Thursday after the U.S. Federal Reserve shifted towards a more dovish stance and media reports quoted EU officials as saying that the European Commission was unlikely to recommend further steps next week in disciplinary procedures over Italy's rising debt.

After keeping rates steady, the Fed suggested the next move for rates is likely to be lower to sustain economic expansion.

Fed officials now think it is appropriate to lower the benchmark overnight rate by a half a percentage point by the end of 2019.

The Italian government proposes to use 5.2 billion euros ($5.9 billion) in expected improvements in its 2019 budget position to avoid European Union disciplinary action for excessive debt, financial daily Il Sole 24 Ore said.

The benchmark CAC 40 index was up 42 points or 0.76 percent at 5,560 after rising 0.2 percent the previous day.

Airbus rose half a percent after bagging orders for its latest passenger jet at the Paris Airshow.

Automaker Renault advanced 1.6 percent and Peugeot added 1.8 percent.

Banks BNP Paribas, Credit Agricole and Societe Generale fell 1-2 percent as Euro zone government bond yields opened lower across the board on expectations of lower interest rates.

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