European Stocks Drop As Fed Statement Eyed
European stock markets dropped on Wednesday, with what is likely to be a volatile day ahead as investors wait for the much anticipated monetary-policy decision from the U.S. Federal Reserve.
The Stoxx Europe 600 index dropped 0.5% to 291.46, flirting with a second straight day in the red.
Shares of Imagination Technologies Group PLC slid 4.1% after the chip designer reported a drop in full-year profit.
Shares of Nordea Bank SE gave up 3.8% after the Swedish government said late Tuesday it will reduce its holding in the bank to 7.8% by selling up to 230 million ordinary shares.
Shares of Aggreko PLC dropped 3.3% after UBS cut the firm to neutral from buy.
For most investors, however, the focus was firmly on the U.S. Fed’s policy meeting later in the day. A statement is expected after the European markets close, followed by a press conference by Chairman Ben Bernanke, where market participants will be looking for any hints about tapering the bank’s quantitative easing program. Read: How to trade the Federal Reserve decision
After a strong spring-rally boosted by central bank liquidity, markets started selling off in late May on worries the U.S. central bank will soon scale back its aggressive easing program.
“Today could dictate the rest of the summer and decide whether it will be one of very short or long nights for markets. The reality is that not much has changed data-wise since Bernanke’s [Joint Economic Committee] testimony on May 22, and therefore he has an opportunity to say that the Fed are still data-dependent and leaving no set timetable for tapering,” said analysts at Deutsche Bank in a note.
U.S. stock futures pointed to a mixed open on Wall Street.
Back in Europe, shares of Alcatel-Lucent jumped 6.3% after the telecoms-equipment firm announced a cost-cutting plan aimed at trimming 1 billion euros ($1.34 billion) and selling at least €1 billion of assets by 2015.
France’s CAC 40 index , however, dropped 0.7% to 3,832.87.
Germany’s DAX 30 index fell 0.6% to 8,179.26 and the U.K.’s FTSE 100 index lost 0.6% to 6,336.16.
Source : Marketwatch
