European stock markets have closed mixed, as traders await Janet Yellen's first news conference as head of the Federal Reserve and digest Britain's budget.

Germany's DAX closed up 0.37 per cent to 9,277,05 points on Wednesday, boosted by sharp gains from BMW after the luxury carmaker posted solid financial results for 2013 and issued a bullish forecast for this year.

However, London's benchmark FTSE 100 index slid 0.49 per cent to finish at 6,573.13 points, despite the British government revising higher its growth forecast this year as the country moves out of recession.

France's CAC-40 also closed lower by 0.12 per cent, finishing the trading session at 4,308.06 points.

Markets are "generally calm" ahead of the results of the Federal Reserve meeting, said Kathleen Brooks, analyst at Forex.com.

Mikael Jacoby, a European trader at Oddo Securities, said the "market was lacking any real direction, which can be seen in the volumes, which have declined recently."

US stocks were treading water ahead of the announcement.

About 35 minutes into trade, the Dow Jones Industrial Average rose 15.18 points (0.09 per cent) to 16,351.37.

The broad-based S&P 500 ticked 0.61 points (0.03 per cent) higher to 1,872.86, while the tech-rich Nasdaq Composite Index slipped 3.56 points (0.03 per cent) to 4,330.53.

The Fed is widely expected to continue paring its bond-buying program when it releases its policy statement at 1800 GMT.

Investors are also hoping for some guidance from the US central bank's new head Yellen on her plans for its key interest rate, which is not yet expected to be lifted from its current 0-0.25 per cent, where it has been since late 2008.

Yellen will likely use her press conference "to announce that even if the unemployment rate falls below the previously set target of 6.5 per cent, then the Fed will not raise rates and instead rely on other additional economic indicators to measure the strength of the economy", predicted Markus Huber, senior trader at brokers Peregrine & Black.

In foreign exchange trade, the euro slipped to $US1.3914 from $US1.3932 late on Tuesday in New York.

The pound jumped to 1.195 euros from 1.1908 and to $US1.6638 from $US1.6587.

On the London Bullion Market meanwhile, the price of gold fell to $US1,341 an ounce from $US1,355.75 on Tuesday.

AFP