European stocks closed lower on Wednesday as investors avoided taking risks ahead of a major interest rate decision by the Federal Reserve that could signal the start of a cycle of monetary easing in the North American economy.
The pan-European STOXX 600 index closed down 0.50% at 514.59 points, with the food and beverage sector leading the way among others, down 1%.
The heavily weighted healthcare index fell 0.7%, with Danish drugmaker Novo Nordisk falling 2.4% after a report said its diabetes drug Ozempic was “very likely” to be among the next to face a price cut in the United States.
All major European stock markets closed lower.
The focus remains on the expected start of monetary easing by the US central bank, with a decision on the base interest rate scheduled for 3 p.m. (Brasilia time). According to the CME’s FedWatch tool, money markets see a 53% probability of a 50 basis point breakeven.
“We expect the Federal Open Market Committee to cut by 25 basis points today. We recognize, however, that this is a very difficult decision and will likely be discussed by the board of directors,” Goldman Sachs economists wrote in a note.
“Let’s admit that there are some good arguments for a 50 basis point cut… however, let’s say it’s not clear that the Fed is actually or even feels like it’s behind the curve.”
Meanwhile, in the UK, data showed inflation held steady in August but accelerated in the services sector, which is closely watched by the Bank of England, raising bets that the British central bank will hold interest rates on Thursday.
In LONDON, the Financial Times index fell 0.68% to 8,253.68 points.
In FRANKFURT, the DAX index declined by 0.08 percent to 18,711.49 points.
In PARIS, the CAC-40 index lost 0.57% to 7,444.90 points.
In MILAN the Ftse/Mib index fell by 0.37%, to 33,655.49 points.
In MADRID, the Ibex-35 index fell 0.16% to 11,684.70 points.
In LISBON, the PSI20 index depreciated by 0.93%, to 6,754.67 points.
Source: Terra
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