Europe: Shares slip as investors assess earnings, await Fed rate decision
EUROPEAN shares ended lower on Wednesday, pausing after weeks of strong gains, while investors monitored a raft of corporate earnings ahead of the US Federal Reserve's rate decision later in the day.
The pan-European Stoxx 600 index closed 0.54 per cent lower at 533.47, while other regional indexes also ended their day in the red.
European retail stocks led sectoral losses with a 2 per cent fall. Data showed a more-than-expected decline in eurozone retail sales on a month-on-month basis in March.
Healthcare shares fell 1.8 per cent. Shares of drugmakers AstraZeneca, GSK and Sanofi fell between 1.8 per cent and 4.3 per cent after the US FDA appointed on Tuesday agency critic Vinay Prasad as its top vaccine official.
European equities have recovered their sharp losses from early April, primarily because of several indications that US-China trade tensions could de-escalate.
'They've (European indices) had a strong recovery from the April lows at the beginning of this week. So we're just having a little bit of breathing space,' said Fiona Cincotta, senior market analyst at City Index.
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US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's top economic official in Switzerland for talks this weekend. This could be the first step towards resolving a trade war ignited by U.S. President Donald Trump.
Meanwhile, focus will be on the Fed's interest rate decision later in the day. While traders expected the central bank to keep rates unchanged, they will look for comments on future policy moves.
'There is a little bit of nervousness ahead of the Federal Reserve interest rate decision later today, where potentially the Fed could adopt a more hawkish lean.'
Separately, German conservative leader Friedrich Merz was elected chancellor by parliament in a second round of voting after an unprecedented defeat on a first attempt got his coalition government off to a wobbly start.
Mark Branson, the president of Germany's bank watchdog BaFin, said on Wednesday that the nation's financial firms were in a strong position but that uncertainty would remain extremely high.
Among individual stocks, Novo Nordisk was up 1.3 per cent after it surpassed first-quarter profit estimates, though it cut its 2025 outlook.
Jyske Bank rose 7.1 per cent, the best individual performer for the day, after the Danish lender posted strong first-quarter results.
Ambu slumped 13.5 per cent, after the Danish medical equipment maker reported second-quarter sales and earnings below expectations.
Tomra tumbled 7.7 per cent after the Norwegian provider of recycling and waste sorting solutions posted weaker-than-expected first-quarter earnings.
BMW rose 1.6 per cent after the luxury carmaker posted better-than-expected first-quarter results and confirm its 2025 outlook. REUTERS
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