* FTSEurofirst 300 up 0.4 percent, adding to Tuesday's rise
* Banks pace the gains, led by BNP Paribas, UniCredit
* Index on track to record best quarter in nearly a decade
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By Blaise Robinson
PARIS, Sept 23 (Reuters) - European stocks rose in early trade on Wednesday, adding to the previous session's gains and led by banks such as BNP Paribas and UniCredit, ahead of the U.S. Federal Reserve's rate decision.
Miners also rose, with Rio Tinto up 1.6 percent and Xstrata up 2.2 percent, despite lower metal prices, as the dollar hit a one-year low against a basket of currencies.
At 0840 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,008.69 points. Banks gained ground, with BNP Paribas up 1.2 percent, UniCredit up 1.9 percent, and UBS up 1.1 percent.
Miners were helped by the weaker dollar, which is seen as supportive of demand for metals.
"There is no clear trend at the moment, no big buy or sell signals," said Jacques Henry, analyst at Louis Capital Markets, in Paris.
"Last year's slump was excessive, but this has now been fully corrected, and at this point, it's hard to see a catalyst that could keep the rally going," he said.
Stocks in the FTSEurofirst 300 index currently trade at 13.75 times expected earnings, the index's highest price-earnings ratio since May 2006, according to Thomson Reuters data.
Around Europe, the UK's FTSE 100 index was up 0.3 percent, Germany's DAX index up 0.3 percent, and France's CAC 40 up 0.4 percent.
TeliaSonera soared 4.4 percent on renewed market talk of interest by France Telecom, traders said.
A spokesman at the Nordic region's biggest telecom operator declined to comment, while France Telecom denied the rumour.
France Telecom stock dropped 0.8 percent.
Food and pharma companies, seen as defensive plays, were also down. Nestle lost 0.2 percent and Danone dropped 0.3 percent, while Roche fell 1 percent.
Economists forecast the policy-setting Federal Open Market Committee to hold its target range for overnight interest rates steady at zero to 0.25 percent until at least 2010.
A statement outlining the Fed's policy decision was expected after the European market close, at around 1815 GMT.
The FTSEurofirst 300 index has soared 56 percent since reaching a floor in March, and is up 21 percent in 2009, on track to record its best quarterly performance in nearly a decade. (Reporting by Blaise Robinson, editing by Nigel Stephenson)