European Stocks Close Lower As Mood Turns Cautious Ahead Of Fed, BoE Policy Announcements

European stocks closed notably lower on Wednesday with traders choosing to lighten commitments ahead of the Federal Reserve’s monetary policy announcement, due later in the day.

Markets also looked ahead to the Bank of England’s policy announcement, due on Thursday.

Worries about the war in Ukraine and the European Union’s announcement of a new sanctions package against Russia, including an embargo on Russian oil, weighed as well on stocks.

The Federal Reserve is widely expected to raise interest rates by 50 basis points. The Fed’s accompanying statement is expected to provide clues about how aggressively the bank plans to tighten policy going forward.

The pan European Stoxx 600 tumbled 1.08%. The U.K.’s FTSE 100 drifted down 0.9%, Germany’s DAX ended 0.49% down and France’s CAC 40 dropped 1.24%, while Switzerland’s SMI ended 1.01% down.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Poland, Portugal, Russia, Spain and Sweden closed notably lower.

Norway ended higher, while Greece settled flat.

In the UK market, Kingfisher, JD Sports Fashion, Dechra Pharmaceuticals, Avast, ICP, Howden Joinery Group, Segro and Ocado Group drifted down 3 to 5%.

Sainsbury (J), B&M European Value Retail, Rio Tinto, British Land, M&G, Admiral Group, Barratt Developments, Scottish Mortgage, IAG, Land Securities and Anglo American Plc also declined sharply.

Flutter Entertainment rallied more than 5% after reporting higher revenue in the first quarter. Intertek Group, DCC and Aveva Group ended higher by 1 to 1.6%.

In the French market, ArcelorMittal, Airbus Group, Faurecia, Pernod Ricard, Hermes International, Carrefour and Valeo lost 2 to 3.6%. Legrand, Sanofi, STMicroElectronics, Renault, Safran, CapGemini, Societe Generale, Kering and Air France-KLM also ended sharply lower.

Atos soared more than 7%. Vivendi ended nearly 2% up.

In Germany, HelloFresh tumbled nearly 10%. Fresenius Medical Care lost 4.4%. Merck, Zalando, MTU Aero Engines, Vonovia, Symrise, SAP, Continental, Sartorius, Deutsche Wohnen, Volkswagen and Allianz shed 1 to 3.2%.

Hugo Boss ended 2.5% down despite posting strong sales growth in the first quarter of 2022.

Covestro climbed nearly 4%. RWE and Fresenius moved up 3.7% and 3.5%, respectively. Siemens Healthineers rallied sharply after raising its 2022 targets. BASF and Deutsche Post also closed with strong gains.

In economic releases, German exports fell 3.3% month-on-month in March, in contrast to the 6.2% expansion seen in February, data showed earlier in the day. Shipments were forecast to drop 2%.

Overall imports grew 3.4%, following a 4.7% rise in February.

Euro area private sector logged its strongest expansion in seven months in April as the relaxation of pandemic-related restrictions boosted services growth, final data from S&P Global showed.

The S&P Global composite output index rose to 55.8 in April, in line with flash estimate, from 54.9 in March. The score signaled the strongest growth since September 2021.